Crypto.com “accidentally” sent $400M worth of ETH to a wrong address(twitter.com)
twitter.com
Crypto.com “accidentally” sent $400M worth of ETH to a wrong address
https://twitter.com/mikeburgersburg/status/1591611423159111680
58 comments
Onchain data shows that only 285K of the transferred $320k was returned (a week later), suggesting they might actually have been trading those funds on Gate and took a loss.
The price of ETH fluctuates, eg. 260 ETH today is probably worth a different amount of USD than it was a week ago.
It's probably better for clarity if the discussion is had in terms of ETH transferred, not USD value of ETH transferred.
It's probably better for clarity if the discussion is had in terms of ETH transferred, not USD value of ETH transferred.
320k ETH were sent out and 285k ETH came back, not dollars.
Ctrl-Z
Traditional Finance solved this problem hundreds of years ago...
Really?
https://www.theguardian.com/money/2014/nov/08/transfer-money...
https://www.theguardian.com/money/2019/dec/07/i-lost-my-1930...
Should I post more examples? Because I can assure you that there are plenty more.
I am as happy as the next person to take pot shots at crypto currencies and their ilk. But how about we stay honest about the fact that traditional finance is far from benign and more than happy to use and abuse us customers to their liking?
https://www.theguardian.com/money/2014/nov/08/transfer-money...
https://www.theguardian.com/money/2019/dec/07/i-lost-my-1930...
Should I post more examples? Because I can assure you that there are plenty more.
I am as happy as the next person to take pot shots at crypto currencies and their ilk. But how about we stay honest about the fact that traditional finance is far from benign and more than happy to use and abuse us customers to their liking?
Last year, Citi accidentally sent Revlon $500m who kept it even though Citi immediately asked for it back:
https://arstechnica.com/tech-policy/2021/02/citibank-just-go...
https://arstechnica.com/tech-policy/2021/02/citibank-just-go...
It was later reversed on appeal.
It's important to note that they didn't just send it to some random company, but rather to creditors.
> Under New York law, someone who sends out an erroneous wire transfer—for example, sending a payment to the wrong account—is entitled to get the money back.
> But the law makes an exception when a debtor accidentally wires money to a creditor. In that case, if the creditor doesn't have prior knowledge the payment was a mistake, it's free to treat it as a repayment of the loan.
It's important to note that they didn't just send it to some random company, but rather to creditors.
> Under New York law, someone who sends out an erroneous wire transfer—for example, sending a payment to the wrong account—is entitled to get the money back.
> But the law makes an exception when a debtor accidentally wires money to a creditor. In that case, if the creditor doesn't have prior knowledge the payment was a mistake, it's free to treat it as a repayment of the loan.
[deleted]
How? People send money to the wrong account all of the time in traditional finance. It is not a solved problem.
The ability, through various means, of reversing the transaction or otherwise redirecting funds to the correct recipient, is what's been solved.
This solution is also a major source of chargeback fraud, FWIW. The people who get screwed from that aren't financial institutions, it's merchants - often small mom and pop shops that lack the resources of predatory multinational corporations to challenge this type of activity.
From their perspective, protection from chargebacks is protection from fraud.
From their perspective, protection from chargebacks is protection from fraud.
Well, show me these mom and pop shops (that aren't dark web drug dealers or porn sellers) that won't accept credit cards and will only accept crypto payments. Despite the chargeback fraud (an entirely different problem than what this thread was discussing, by the way) basically nobody has abandoned credit cards and gone crypto-only.
Which is what happened here. I imagine traditionally one bank asks the other bank to reverse the transaction. Here one exchange asks the other exchange to reverse the transaction.
From the link:
> Recap:
> - cryptodotcom sent 320k ETH to Gate
> - Gate sends 285k back
> Recap:
> - cryptodotcom sent 320k ETH to Gate
> - Gate sends 285k back
[deleted]
They can almost always claw it back.
Yes, but not always:
https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...
https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...
Citibank won on appeal: https://www.reuters.com/markets/us/citigroup-wins-appeal-ove...
Citigroup Inc is entitled to recoup about $500 million of its own money that it accidentally wired Revlon Inc lenders three years early, a U.S. appeals court said on Thursday. Reversing a lower court ruling, the 2nd U.S. Circuit Court of Appeals in Manhattan said it was improper to give the lenders a "huge windfall" by letting them keep Citigroup's money, and that they had been on notice the wiring was a mistake.
Citigroup Inc is entitled to recoup about $500 million of its own money that it accidentally wired Revlon Inc lenders three years early, a U.S. appeals court said on Thursday. Reversing a lower court ruling, the 2nd U.S. Circuit Court of Appeals in Manhattan said it was improper to give the lenders a "huge windfall" by letting them keep Citigroup's money, and that they had been on notice the wiring was a mistake.
It comes at the cost of having inflationary currency that punishes you for saving rather than spending, unlike non-inflationary currencies.
Some people care more about the property of being non-inflationary than they do about the property of transaction reversibility.
Edit: Why the downvote? You caring more about reversibility doesn't mean it's a universally shared value.
Some people care more about the property of being non-inflationary than they do about the property of transaction reversibility.
Edit: Why the downvote? You caring more about reversibility doesn't mean it's a universally shared value.
It’s hard not to complain about downvotes, but worthwhile. The goal is to write for an audience, and to foster curious conversation. Sometimes votes reflect that, sometimes not, but we always have control of what we ourselves write.
In this case, it may be the snark. I recently fell victim to this myself a couple months ago. It’s very easy to be snarky without really meaning to; doubly so about topics you care deeply about. The “low, low cost” bit is hard to read as anything else. (It’s what kept me from giving your comment a deserved upvote, because you’re right. But the conversational quality supersedes merely being right.)
In this case, it may be the snark. I recently fell victim to this myself a couple months ago. It’s very easy to be snarky without really meaning to; doubly so about topics you care deeply about. The “low, low cost” bit is hard to read as anything else. (It’s what kept me from giving your comment a deserved upvote, because you’re right. But the conversational quality supersedes merely being right.)
Thank you for the good faith feedback, I appreciate it and will try to avoid the snark moving forward.
Instead of having an inflationary currency, you have inflation in the number of currencies.
Sure, but you are not forced to use shitcoins. There will naturally be some cryptocurrencies that are worse than others, just as there are FIAT currencies worse than others (e.g. Venezuelan Bolivar vs the Swiss Franc). Consumers being given a greater choice offers opportunity for them to choose to use currencies with superior qualities than the ones they would otherwise have access to. Like with other choices in life generally, the consumer has a responsibility to make an informed choice. While failing to do so has adverse effects for the consumer, it is not the fault of the currency that the consumer made an uninformed or poor choice, no?
If exchanges can and do "reverse" transactions, what's the point of crypto? Legal use-cases only. Honestly curious. Each time I ask people talk about how they're from some country and need to send money to their grandma in some other country and their government won't let them, nor will their traditional services, etc. etc. Fair enough, but you're technically just circumventing the government and its laws there.
I'm more curious about a situation where it's totally legal in every respect and crypto is better.
I'm more curious about a situation where it's totally legal in every respect and crypto is better.
If it had accidentally been sent to some unknown guy in Kazakhstan, the money is gone.
Here it was sent to a known address tied to a legal entity, and the law does not allow for keeping accidental deposits ... it wasn't "reversed", it was voluntarily sent back.
Here it was sent to a known address tied to a legal entity, and the law does not allow for keeping accidental deposits ... it wasn't "reversed", it was voluntarily sent back.
Sure, but that's tangential to my point as Crypto.com would've been bound by the law either way, no?
I went to read the web3isgoinggreat.com write-up for this, but didn't see the article on the front page, so I searched for crypto.com and was reminded of this from Aug 2022: https://web3isgoinggreat.com/?id=cryptocom-wants-back-the-7-...
That's funny, but you should definitely consult a lawyer on the finders keepers rules in your local jurisdiction before spending a bank error windfall.
> a bank error windfall.
I believe the correct "web3" retort is "code is law" :-D
But in all seriousness, this is the debate I see going back and forth a lot around crypto: proponents say it allows getting out from underneath the thumb of "the man," others argue that a phone call to undo a mistake is an advantage of a human and lawyer-centric financial system
I believe the correct "web3" retort is "code is law" :-D
But in all seriousness, this is the debate I see going back and forth a lot around crypto: proponents say it allows getting out from underneath the thumb of "the man," others argue that a phone call to undo a mistake is an advantage of a human and lawyer-centric financial system
As you correctly write some crypto people really believe that.
In reality you now have two regimes: The code and the traditional financial/legal system.
If there is a conflict the later will win (with all it's advantages and disadvantages)
In reality you now have two regimes: The code and the traditional financial/legal system.
If there is a conflict the later will win (with all it's advantages and disadvantages)
The latter's clearance rate for murders hovers a bit below 55% in the richest country on the planet. I wouldn't rely on any system that achieves a success rate in the vicinity of a coin flip for the most important challenges, and I certainly wouldn't count on it solving smaller, less significant issues with any reliability.
Which one is the richest country?
The USA, unless something changed recently. Using GDP as the metric.
Nominal total GDP? Per-capita? By PPP? USA is only at the top in one of them. Which one is more relevant when talking about crime or justice system?
Nominal total GDP, but you bring up a fair point. That said, I don't know that any of those are particularly relevant to criminal justice success rates. I imagine a metric like "average law enforcement spending per department" might be a good starting point, but would not necessarily account for efficiency or misuse.
What metric do you think would be best, and how does / do you think the US scores on it, depending on the availability of the metric?
What metric do you think would be best, and how does / do you think the US scores on it, depending on the availability of the metric?
Since high absolute GDP is achievable while having a lot of societal issues (cf #2 China), at least adjusted per-capita metrics seem to make more sense.
In other words, I wouldn't say a #1 total GDP country having issues with murders and solving them is somehow a condemnation of legal system in general.
In other words, I wouldn't say a #1 total GDP country having issues with murders and solving them is somehow a condemnation of legal system in general.
At this point, people who leave their stuff at exchanges deserve to lose it.
Like, what else can drives the not your keys, not your coins mantra. CEXs are either greedy, or incompetent. Either way your “money” is not safe.
Of course, managing your own keys and being your own bank is work and comes with risks. It’s not for everyone. So, if you can’t or don’t want to do it. Then, perhaps Crypto is not for you.
Like, what else can drives the not your keys, not your coins mantra. CEXs are either greedy, or incompetent. Either way your “money” is not safe.
Of course, managing your own keys and being your own bank is work and comes with risks. It’s not for everyone. So, if you can’t or don’t want to do it. Then, perhaps Crypto is not for you.
Fees are cheaper on centralized exchanges. Like with everything else in crypto, transaction fees kneecap most of the cool stuff.
Isn't that a pretty lame excuse? In exchange for saving a few dollars, you're going to hand over the keys to your entire account -- or possibly your entire net worth -- to an unknown, unregulated, unaccountable corporation?
It's not an excuse, just an economic reality. People prescribe value to things. The value of a typical transaction at a centralized exchange isn't worth the on-chain transaction cost. That's a problem with current blockchains, not a problem with the purchaser.
I can send thousands of dollars (with a 'priority' fee schedule) for less than a dollar in fees over the plain 'ol regular BTC network. It may be an economic reality, but it's a negligible one.
> That's a problem with current blockchains
So another "crypto fixes that" that really, it doesn't fix
So another "crypto fixes that" that really, it doesn't fix
that's awesome. I don't know what I would do if I received that much cryptocurrency- probably launder it and give it to charity.
Unfortunately since it was the address of a known business they've worked with, there's no way they'd be able to get away with keeping that money short of sending it to another address and leaving the country before the FBI can stop them.
Personally, I think crypto should be: live by the sword, die by the sword. The agreement is the code is law, so the code should be law.
If you don’t return $400M of anything you’d have to factor in the risk of a hybrid model of live by the code, die by the sword.
$400M can buy some protection
Even as a business, am I legally required to return crypto that was given to me?
"All funds were returned. We have single digit USD million balance on Gate as of now."
https://twitter.com/kris/status/1591610511246102528