Coinberry Loses $3m Due To Software Glitch – Files Lawsuit For Recovery

Coinberry, a Canadian digital asset trading platform, has filed a lawsuit for the loss of 120 Bitcoins (BTC), with a worth of approximately $3 million. The Financial Post disclosed that Coinberry, Canada’s first regulated, crypto-only trading platform, lost the money due to a software glitch.

The case, filed in Brampton, Ont., west of Toronto, states that Coinberry’s lawsuit targets 50 customers, and also names the world’s biggest crypto exchange, Binance, alleging that those users had transferred the bitcoins to the Binance platform.

“Binance acknowledged that it had identified a quantity of the misappropriated BTC and undertook to restrict any access to the accounts,” the lawsuit read.

Due to the software glitch, the platform accidentally pemitted people buy bitcoin using Canadian dollars that had yet to be properly transferred to their accounts. Although Coinberry has since fixed the issue, more than 500 users had already taken advantage of the vulnerability.

According to Coinberry, the company has contacted each of the 546 registered users by email, demanding the return of the misappropriated bitcoins. Coinberry also reached out to Binance.

Lawsuit Focuses on the Recovery of 63 Bitcoins

Coinberry has reportedly been able to secure the return of approximately 37 of the misappropriated bitcoins from 270 of the affected registered users. That leaves 83 bitcoins outstanding from the remaining close to 270 other users. However, the lawsuit specifically targets the acquisition of 63 of those bitcoins, including 9.48 units that were transferred to Binance.

According to Coinberry’s list, 20 of the 120 bitcoins were originally lost, but more than 200 of the 546 users were alleged to have misappropriated them from Coinberry.

The largest amount pilfered by a single user and not returned was $385,722.31 worth of bitcoin, as valued in April 2022.

In similar cases, BlockFi, a crypto lender, once mistakenly deposited $10 million USD of bitcoin into users’ accounts. OptiFi, a decentralized exchange, said in August that it had accidentally shut itself down, leading to $661,00 worth of crypto to become permanently locked.

Coinberry is backed by WonderFi Technologies, a Vancouver-based crypto outfit backed by Shark Tank personality O’Leary, which bought Coinberry in a $38.5 million deal in July.

On the Flipside

  • It is unclear why Coinberry has resorted to suing Binance, given the latter’s apparent cooperation.

Why You Should Care

The case highlights the difficulties faced by crypto companies when handling assets with inherently irreversible transactions.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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Author

Akriti is a Zurich-based reporter, focused on the political, regulatory, and legislative developments around crypto. She is a business journalist with over six years of experience working as a correspondent for organizations like Channel NewsAsia and Bloomberg TV India. In that time, Akriti has covered news in the finance, pharma, and state sectors.