back to article Another crypto shocker: Major player actually corrects $400m mistake instead of cratering

Over the weekend it was revealed that cryptocurrency exchange company Crypto.com accidentally sent over $400 million to another cryptocurrency exchange and was miraculously able to get it back. The accidental recipient, Gate.io, released a statement detailing how it caught on to the October 21 320,000 ETH ($416 million) …

  1. Jedit Silver badge

    320k out, 285k in

    Is no-one else wondering what happened to the 35,000 play coins that weren't returned?

    1. Snowy Silver badge
      Coat

      Re: 320k out, 285k in

      That is quite a "fee" for returning the money.

      1. Zippy´s Sausage Factory

        Re: 320k out, 285k in

        Assuming there wasn't already a large transfer queued up to be made to gate.ai and they basically returned all the coins they weren't actually expecting?

        1. Snowy Silver badge
          Coat

          Re: 320k out, 285k in

          Not from what I read in the article, it was sent to the wrong address rather than the wrong amount.

          <quote>

          Marszalek chimed in with an answer: it was intended for a new cold storage address, but was accidentally sent to a whitelisted external exchange address instead.

          It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.

          — Kris | Crypto.com (@kris) November 13, 2022

          Now that's a big oopsie.

          </quote>

          It is not clear if they where due to pay some later to that address and reduced the returned amount to cover that but it is unclear if that was the case.

    2. Michael Wojcik Silver badge

      Re: 320k out, 285k in

      According to Molly White, Crypto.com said the remainder was returned to them not long after.

  2. Anonymous Coward
    Anonymous Coward

    So how about the claim that gate.io's coin holdings were, by happy coincidence, audited while all those unexpected ones were resting in their account?

    1. DS999 Silver badge

      How would that work exactly?

      Let's say you're operating a crooked exchange that has stolen millions and as a result you'll fail an upcoming audit. You ask another exchange to lend you a bunch of crypto to cover the shortfall to be returned after the audit is complete.

      Who in the right mind would lend a company that has stolen (or if you prefer, lost due to third party theft or incompetence) cryptocurrency in the past, when there would be no way to enforce its later return?

      Sorry the conspiracy doesn't pass the smell test, anyone who has lost $400 million whatever the reason isn't likely to get anyone to loan them $400 million to cover that on a "temporary" basis when they have no legal or technical recourse to recover that money. At least when a bank loans a money losing business $400 million they have to put up collateral that they can recover in the court system. The equivalent in the banking world would be a collateral free loan on a handshake promise, which they don't do.

  3. Andy The Hat Silver badge

    Re FTX

    Question: "Just how so much went so wrong so quickly is the question on many people's minds."

    Answer: "Crypto"

    1. This post has been deleted by its author

      1. Anonymous Coward
        Anonymous Coward

        Re: Re FTX

        Exactly. Basically that and operating as a Ponzi scheme. Hopefully jail will soon follow.

        It does seem The Register has been awfully quiet on the FTX story.

        1. Jedit Silver badge

          "It does seem The Register has been awfully quiet on the FTX story."

          I don't blame them. There's going to be a lot of legal wrangling in the next few months and inaccurate reporting now would not be good.

          Regarding the bouncing of funds around to whitewash audits: there are strong reasons to believe that this has been going on, and it's not restricted to one or two exchanges either.

      2. jmch Silver badge

        Re: Re FTX

        Exactly. As crypto matures it will come up against a bunch of issues that traditional banking has already solved by having strict protocols in place, flags on certain accounts and amounts, double and triple verifications etc. Of course they could have built those in if they had asked a banker in the first place instead of redesigning everything from scratch just to be disruptive.

        Of course, retrieving mistakenly transferred money in traditional banks is easy because it's really solvable between the 2 parties involved. Rolling back a crypto transaction is nigh-on impossible given that everyone else on the network has to approve it, which I guess is why they went for a reverse transfer... though as another commenter mentioned above, unsure of the reason of unequal amounts. Maybe a cooperation fee if the recipient wasn't legally obliged to return them?

        1. This post has been deleted by its author

          1. lglethal Silver badge
            Trollface

            Re: Re FTX

            "It's more down to whether you are corrupt, incompetent, or just plain stupid."

            How about all three?

            1. This post has been deleted by its author

            2. Anonymous Coward
              Anonymous Coward

              Re: Re FTX

              > How about all three?

              Ok, enough talking about me.

        2. Youngone Silver badge

          Re: Re FTX

          "As crypto matures ..."

          Crypto is mature. Scam artists have been using it quite successfully for several years now.

          1. Snowy Silver badge
            Joke

            Re: Re FTX

            Crypto matures like fine wine or raw meat?

        3. Anonymous Coward
          Anonymous Coward

          Re: if they had asked a banker in the first place

          BUT MAH FREEDUMB!!!

  4. tony72

    Well ...

    ... what's a few hundred million amongst friends?

  5. sitta_europea Silver badge

    "The biggest, newest crater is crypto exchange FTX and the once-stellar reputation of its founder Sam Bankman-Fried after funds disappeared ..."

    Funds didn't disappear. They were never there in the first place.

    1. Anonymous Coward
      Anonymous Coward

      Whoops ..... there goes another few hundred million dollars !!!

      "Funds didn't disappear. They were never there in the first place."

      There is a very real problem with lack of funding to support all 'possible' results of trading crypto-currencies BUT ...

      Funds DO disappear [many a time and oft :)] ... the question is the ease with which this happens !!!

      After all the time crypto-currency has existed and and has been traded etc, it is still apparently easy to 'hack' and 'disappear' many many milliions of Dollars.

      I do have some difficulty believing that this is just happenstance for some random hacker !!!

      It happens far too regularly and at such 'convenient' times :) !!!

      If 'caveat emptor' ever should be applied it is when 'playing' in the world of crypto-currency !!!

  6. Anonymous Coward
    Anonymous Coward

    So what.. the risk control and security audit system when it spots a huge unexpected weird payment... allows it... but tells you so you can then go to the recipient and ask nicely for it back again?

    WTactualF?

    1. FIA Silver badge

      It notices it due to a large amount of funds arriving in it's account, it's too late to stop it at that point.

  7. Anonymous Coward
    Anonymous Coward

    Uh, about currency of the spendable type..

    I admit to not having much of a grasp of the "finer" points of financial stuff, but i thought that currency can only be created by governments, and that creating your own is illegal. Seems to me, then, that claiming that getting a PC to do some difficult, but pointless in the real world computations isn't actually creating money at all, it's simply claiming to, ie: false advertising, plus treadig on the toes of governments just about everywhere.

    Put another way, cryptocurrency seems about on a par with NFT's, where, as I understand it, you pay lots of money for exclusive use of a link that points to some file on someone else's computer. Which I truly do not see the point of at all.

    Have I simply misunderstood it all?

    1. Oh Matron!

      Re: Uh, about currency of the spendable type..

      Nope. Not at all.

      On my various frequent flyer accounts nectar, etc, it does mention that points have no monitory value. Crypto, it appears, is just the same :-)

    2. Michael Wojcik Silver badge

      Re: Uh, about currency of the spendable type..

      Currency is any sort of bearer-token proxy for value that some market of significant size is willing to to accept. You can use pebbles as currency if you can find people who will trade things you want for them.

      In the modern era we mostly see top-down currencies, which are issued and controlled by governments. In some cases, where governments fail particularly badly, bottom-up currencies created by "the people" appear; this happened in parts of Somalia a while back, for example, where people started using nominally-worthless old bank notes as IOUs in the city markets and eventually they were circulating as currency again.

      Most cryptocurrencies are bottom-up currencies, though we have some central banks such as Singapore's pushing top-down cryptocurrencies (for no readily-apparent good reason).

      To the extent that cryptocurrencies can be exchanged for goods and services that buyers want to purchase, they're currencies. Governments can restrict or outlaw them, of course; governments can restrict or outlaw anything, including things that may be imaginary (e.g. China placing restrictions on reincarnation). That's the beauty of holding the monopoly on force. But few or none have simply outlawed cryptocurrencies or other bottom-up currencies outright, to the best of my knowledge.

  8. Anonymous Coward
    Anonymous Coward

    "Sam Bankman-Fried"

    Nominative determinism?

  9. Michael Wojcik Silver badge

    GRRM predicted it all

    So Crypto Winter has come and now the Crypto King is dethroned. Presumably crypto dragons and crypto ice zombies are right around the corner.

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