An Australian cryptocurrency exchange, OTCPro, is fervently working to reclaim a substantial sum of about $328,000 that was mistakenly transferred to a user. The incident took place in January when Rhino Trading, OTCPro’s parent company, intended to deposit $65,300 but instead transferred ten times that amount, totaling $653,000, to the user’s account.
Exchange Faces Legal Challenge
The exchange noticed the error on February 4th and contacted the user, Kow Seng Chai, for the return of the funds. However, the company alleges that Chai ignored their emails. Court filings reveal that Chai utilized a portion of the funds to buy Tether, a cryptocurrency, and rapidly withdrew approximately $626,700 in multiple $100,000 installments from his account over a span of 10 days.
Further complicating matters, Rhino Trading received a response from an individual at the phone number associated with the account claiming it was not Chai’s contact. Chai also failed to present himself in court, leading the Victoria State Supreme Court to place a hold on his assets on February 9th and bar him from exiting the country on February 21st. Judge Michael Osborne voiced concerns over the potential dissipation of the assets and cast doubt on the authenticity of the bank statements presented.
Previous Incidents and Consequences
As the legal proceedings unfold, OTCPro confronts a net loss of around $322,700, the difference between the erroneously sent funds and the current account balance. This costly blunder by OTCPro echoes a similar incident from May 2021 where Crypto com mistakenly sent $6.86 million to a Melbourne couple due to an employee’s error with an Excel spreadsheet.
Believing the windfall was a gift, the couple indulged in property, cars, and presents for relatives. The aftermath saw Manivel receiving an 18-month community correction order in September 2023, and Singh awaiting his court date in March to face the repercussions of their spendthrift actions.