He was supposed to receive $701, but he received 701 bitcoins from Blockfi. He woke up a millionaire overnight with 701 BTC in his account, over 23 million dollars at the price of $34,000 on bitcoin.
The startup said it made incorrect promotional payments in Bitcoin and not in US dollars and worked to fix the problem. Still, some recipients have already withdrawn the coins before the company can do anything.
The erroneous deposits of Bitcoin in the accounts of BlockFi users did not affect the current operations of the creditor, and the company records record levels of uninterrupted trading volume, the general manager said on Wednesday.
BlockFi Inc, a cryptocurrency loan startup, accidentally sent Bitcoin to users as part of a promotion and is still working to fix the situation.
The company made what it called “incorrect promotional payments” in Bitcoin instead of US dollars to certain customers. Although BlockFi tried to cancel them, a number of beneficiaries withdrew the coins before the company could give them back.
There were less than 100 customers, the company said, and not all received 700 BTC, others received 5 BTC. The company’s loss is about $10 million, although that amount decreases as more and more users return the coins, said Zac Prince, co-founder, and CEO of BlockFi.
“BlockFi has reserved for loss prevention as part of its accounting policies, and this is a fraction of existing loss reserves – so there is no negative impact on equity or the platform’s current operations. The problem that caused the error has been resolved, and additional safeguards have been developed to prevent any similar issues in the future. “ Zac Prince
The erroneous deposits did not affect BlockFi’s ongoing operations, and the company is recording record levels of uninterrupted trading volume, he added.
Meanwhile, screenshots of the deposits have made the rounds on social networks, with at least one Tweet showing a deposit of 700 Bitcoin.
Last week, BlockFi wrote on Twitter that some participants in the promotion ” may see an inaccurate bonus payment displayed in their transaction history .”
In the meantime, the company sent an email to the affected users requesting that the money be returned.
BlockFi, perhaps the most popular non-bank cryptocurrency company, offers a range of crypto products, including loans and interest deposits, and manages platforms for cryptocurrency trading. The company has been in the spotlight lately, as its capital and customer base have also grown in recent months.
The cryptocurrency company’s mistake is reminiscent of Citigroup Inc.’s $ 500 million blunder. Since last summer, when he accidentally sent payments to a group of creditors.
“if we were to isolate the problem, it was just a temporary mistake.”
“An error that banks frequently make, in dollars. But because this is a volatile cryptocurrency, the mistake has been amplified. “ Mike Loukas, CEO of TrueMark Investments, about BlockFi.
Not all customers want to return bitcoins
Some customers withdrew the bitcoins from the account as soon as they received them. BlockFi sent an email to all the customers in question, asking them to return the money. Most returned the money, but BlockFi has not been able to recover the total amount yet.
A customer canceled the withdrawal, but it was too late, and the bitcoins had already reached his secure wallet, cold storage, without him knowing. The next day, he was called by BlockFi and threatened with criminal prosecution if he did not return the money.
A Reddit user complained that he withdrew his funds from BlockFi, but the company threatened to sue him if he did not return the funds, although it was confusing.
Some take the side of those who kept the bitcoin sent by mistake, arguing that there is no legal basis to sue them since the nature of the blockchain shows that you can send BTC to the wrong address and not You can never recover, so if BlockFi sent it wrong, it’s their responsibility, especially since they have reserves to cover the losses.
The debate continues on Reddit. Those involved with BlockFi have argued that you can’t get rid of the clean sheet by taking the wrongly sent bitcoins because BlockFi has all your data, address, ID card and can sue you based on bad faith and attempted theft.