- The OTCPro Crypto exchange makes a $600k accounting error.
- Recipient Kow Seng Chai cannot be contacted.
- Crypto.com made a similar mistake in 2022.
Cryptocurrency is littered with examples of overnight riches, such as the 2021 Dogecoin run that saw investors net a mindblowing 9,600% gain over four months. However, rather than luck out on a winning token, Australian-Malaysian Kow Seng Chai hit the crypto jackpot following a US$600,000 accounting error by the OTCPro crypto exchange.
Crypto Exchange Pulls a Howler
As reported by the Australian Broadcaster Corporation, the OTCPro crypto exchange mistakenly credited Chai with AUS$995,000 (US$650,000) after he made an AUS$95,000 (US$65,000) deposit on January 24. Chai’s crypto account balance ballooned to AUS$1.36 million (US$891,000) when including his existing legitimate deposits.
OTCPro noticed their monumental mistake ten days later when Chai had already withdrawn A$956,000 (US$626,000) from the windfall sum. Furthermore, Chai had seemingly disappeared, as OTCPro’s frantic attempts to contact him by email and phone were left unanswered.
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The crypto exchange applied for a legal order to freeze Chai’s assets and prevent him from leaving Australia, which the Victorian Supreme Court granted. Commenting on the case, Shaanan Cohney, a cybersecurity expert at Melbourne University, noted that it is rare for individuals who receive such accidental crypto deposits to return the money. They tend to disappear “into the ether,” stated Cohney.
Shades of Crypto.com
Chai’s disappearance into the ether bears a striking resemblance to Thevamanogari Manivel’s case, which saw the disability support worker arrested at Melbourne Airport in 2022 while trying to board a flight to Malaysia.
Crypto.com had accidentally credited Manivel with AUS$10.5 million (US$6.9 million) after she had put through a refund for AUS$100 (US$66). The crypto exchange admitted that the error occurred because an employee manually entered the wrong figure into an Excel spreadsheet.
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The mistake was spotted seven months later during an internal audit. By then, Manivel had purchased four houses, cars, and artwork and transferred AUS$4 million (US$2.6 million) to a Malaysian bank account.
Maniviel told police she ignored attempts to contact her as she thought they were scams. In September 2023, Maniviel pleaded guilty to dealing with the proceeds of crime and received an 18-month community corrections order, including unpaid community work.
On the Flipside
- Social media comments indicate general acceptance of Kow Seng Chai‘s good fortune.
- Crypto.com has updated its refund and withdrawal process since the Manivel error.
Why This Matters
The OTCPro and Crypto.com cases suggest that crypto firms lack robust internal processes to prevent overpayments from happening in the first place. Although such cases remain rare, costly errors like these highlight an industry continuing to refine its business practices.
Read more on Bitcoin exchange outflows at record high levels here:
Bitcoin Exchange Outflows Surge to 8-Month High: What’s Next?
Find out about Cardano and Terra’s high project failure rate here:
Cardano and Terra Are Rife with Dead Coins: Alpha Quest
