An Australian Crypto Exchange Faces Challenges Retrieving Mistakenly Credited Funds
An Australian crypto exchange is facing difficulties in retrieving approximately $328,000 from a user after mistakenly crediting their account. Rhino Trading, the parent company of the crypto exchange OTCPro, transferred $653,000 to the user in error, far exceeding the intended amount of $65,300. Despite recognizing the mistake and attempting to contact the user, named Kow Seng Chai, the exchange has been unsuccessful in recovering the funds.
Court documents reveal that Chai allegedly took advantage of the mistakenly credited funds to purchase Tether and subsequently withdrew around $626,700 from the exchange in multiple transactions. Each withdrawal was limited to $100,000 per day. The exchange’s efforts to reach Chai have been met with obstacles. When contacting the phone number associated with his account, someone other than Chai answered and claimed it was not his number. Furthermore, Chai failed to appear in court, leading to additional legal action.
The Supreme Court Steps In
To address the risk of asset disposal, the Supreme Court of Victoria froze Chai’s assets on February 9. A subsequent injunction issued on February 21 aimed to prevent Chai from leaving the country. Justice Michael Osborne emphasized the seriousness of the situation and highlighted the “real risk of assets being disposed of” during his ruling.
The Exchange Reports a Net Loss
As a result of this incident, the exchange has reported a net loss of nearly $322,700 after subtracting Chai’s remaining account balance from the total mistakenly sent funds.
A Similar Incident in 2021
This incident bears resemblance to a similar mistake made by Crypto.com in 2021. A Melbourne couple received 10.5 million Australian dollars ($6.7 million) due to a clerical error and believed they had won a prize from the exchange. However, during legal proceedings, Crypto.com clarified that no such competition had been communicated to users. The couple now faces legal consequences for their actions.
One of the individuals involved, Thevamanogari Manivel, received an 18-month community corrections order in September 2023 for recklessly dealing with the proceeds of crime. Jatinder Singh is scheduled for a court hearing in March.
Hot Take: The Importance of Accuracy and Due Diligence
In the world of crypto exchanges, accuracy and due diligence are paramount. Mistakes like the one made by Rhino Trading can have significant financial consequences for both the exchange and its users. It serves as a reminder that even in the fast-paced and rapidly evolving crypto industry, attention to detail is crucial.
For users, it’s essential to remain vigilant and take appropriate action if they receive funds that are clearly in error. While it may be tempting to take advantage of such situations, engaging in unauthorized transactions can lead to legal repercussions, as demonstrated by the Melbourne couple involved in the Crypto.com incident.
As a crypto enthusiast, you play a role in maintaining the integrity of the industry. By exercising caution and reporting any potential errors or suspicious activities to exchanges, you contribute to a safer and more trustworthy ecosystem for everyone involved.
In conclusion, this case highlights the challenges faced by an Australian crypto exchange in retrieving mistakenly credited funds. The exchange’s efforts to recover the funds from the user have been met with difficulties, including unresponsiveness and obstacles in contacting the user. The Supreme Court has taken steps to freeze the user’s assets and prevent them from leaving the country. This incident serves as a reminder of the importance of accuracy and due diligence in the crypto industry, both for exchanges and users.
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