Woman forced to sell 4-bed house after crypto exchange wrongly refunded $7.2m An Australian woman has been sued after she received part of an erroneous refund from a cryptocurrency exchange – erroneous by five zeroes – that it failed to notice for seven months. Documents from the Supreme Court of Victoria reveal that plaintiffs Foris GFS Australia Pty Ltd and Foris AU Pty Ltd, the corporate entities …
How far could the court have gone to force her to return it? Theoretically, it could be secured in a way that would lock it up entirely without her disclosing the password (with sufficient complexity to resist brute force), assuming asset seizures didn't sway her.
Quite far. If you have money that they say isn't yours, they can do lots of things to get it off you. Holding it in ways they can't break is another crime, and they can apply penalties until you give up the money. There's a reason the successful thieves run to another country and live in obscurity, because if law enforcement has the ability to penalize you, they can find ways to make you change your mind.
As far as it wants really - the law has primacy over technical limitations. If the court says you have to do something, not being able to do it because of technical reasons is not an excuse that will get you out of it. This is one of the big challenges with blockchain. If a court orders you to delete a record the answer "I can't, its on an immutable distributed ledger" does not absolve you of the responsibility to comply with the court order. If you do not comply with the court order, you can be imprisoned until you do (well technically imprisoned for a limited term as punishment, then told to comply on release, and if you don't comply then you get imprisoned again).
It was a Crypto payment so maybe Manivel just thought she'd finally made a good deal at the right time and thought that she should have put a couple of dozen more bitcoins in her pocket a few years earlier? A crypto event like this is impossible to diagnose in detail afterwards but it seems likely that she just got fooled - possibly so impressed that she just gave it away thinking, "LOL, I actually made some money - I didn't expect that!"
A crypto event like this is impossible to diagnose in detail afterwards but it seems likely that she just got fooled
With cryptocurrencies an extra zero or maybe two on the end might be possible but five? There's no way any reasonable person would imagine 10 million was genuine profit when the reality was 100.
I had the reverse happen to me on a payroll once (typically in the US if you own a corp you still need to put yourself on payroll and pay some kind of reasonable salary). So I FAX the latest rates from Cali-F-U to the payroll company near the end of the year, and a month or 2 later, do the first payroll of the year. Then I read the fine print while entering the bank info and what should have been around $70 "contribution" for this one Cali-F-U payroll tax, was more like $7000 !! (I think they entered the tax amount as 150% instead of 1.5%) Well I couldn't screw around with that one and immediately got back to them. Thing is they probably sent it to a NON-REFUNDABLE fund or something, and took over a week to refund me. (fortunately I had enough in the bank to cover paying myself or rent probably would have been late)
In any case it was resolved, but you know most people will NOT be too quick to say "weren't you supposed to deduct XX" or "Why is this check so big?" if they overpay (or undercharge) YOU.
>How did she ever expect to keep the money?
If she'd been richer and the bank had accidentally paid her $900M she could have kept it.
Not the same.
That was $900M which had originally been borrowed from the recipient, and would eventually have been repaid anyway. They were supposed to be wiring the interest, but accidentally repaid the capital as well.
"Since the amount sent back repaid the loaned amounts to the cent and no more, the judge ruled Citibank had no right to reclaim the money."
In particular, there is a law *very specific* to New York state that says if somebody repays a loan you have every right to assume they did so intentionally. And in this case, the loan was repaid to the penny so the lenders (there were several) rationally assumed that the borrower had refinanced, shrugged, and went with it.
Not even remotely the same.
In general the law (in many jurisdictions) very clearly says that if you receive money that is obviously not yours and obviously a mistake, you don't get to keep it.
In the case you are referencing, a borrower accidentally paid back a loan it was owed, and the very specific law in New York state says that if somebody mistakenly pays you what they owe you and you reasonably believe it was intentional, you don't have to undo their mistake.
So completely different.
ALSO - *both* parties in that case were rich and powerful, which completely undercuts your so-called point.
Well, it would seem in the UK there is a legal requirement that the recipient of the transfer should have made attempts to notify the bank and payee of the incorrect payment within 28 days of the payment. If the payee does nothing (within 28 days) the monies belong to the recipient.
So in some respects I'm a little surprised that the court has determined the recipient should return the full monies plus interest. Perhaps she did her case no good by not attending court.
Must be a really smart system they've got, did anyone think of adding validation to confirm large transfers?
They must have also entered the bank account number in the bank account field, so there's another clue about how to protect against mistakes.
I guess the error only showed up after months when somebody either got round to doing some sort of trial balance or just accidentally noticed it. Even having the crypto.com domain seems no guarantee that a crypto company is not just a mess of rank amateurism....
> They must have also entered the bank account number in the bank account field, so there's another clue about how to protect against mistakes.
I know I triple check internet banking transfers when doing a few 100 dollars (or even less).... you'd think they would be extra careful with these sums (unless you become so desensitised to large sums you get a little blaise)
I use a small random number
In the US when you link two bank accounts to allow transfers between them, they (at least in my experience) will do two small withdrawals and one credit, of random amounts which cumulatively add up to zero. In order to enable the transfers for real you have to enter the amounts of those transfers to demonstrate you have access to both bank accounts.
That way if you typo the routing number or account number those random transfers will go to someone else's account, and when you don't see them in the intended account will know you screwed up somewhere but at least you won't send real money into the ether!
That wouldn't fix entering the account number as the amount, but I guess I'm protected from that by being limited to $10,000 in transfers in a day. Which is fine most of the time, but sometimes I've had to do transfers over several days as a result, or am forced to use cashier's checks or wire transfers (the cashier's checks cost less for some inexplicable reason) for large amounts.
When the money is not yours, people get very blaise about the sums involved.
I guarantee that if the person doing the transfer was sending $100 from their own account, they'd have double and triple checked everything. But because it's not their money, and they probably, have a dozen other transfers to make before lunch time, then meh. Quick, quick, quick, get it done, so you can have another chat at the coffee machine. That's people, it's also why business software really should have even more checks on it then personal software.
What gets me is that they didnt find this for 7 months! I mean surely they do an assets and liabilities review every 3 months at the MOST. I mean monthly would make more sense with such crypto bollocks. How can you miss Millions for 7 months and not notice...
When I was lucky enough to be able to pay off my mortgage lump sum, the receiving body said the onus was on me to enter the correct sort code and account number. They said there was no other way to do it and if I made a mistake then the money would effectively disappear and I would still owe the full amount. This didn't seem to bother them. Especially as BACS transfers of smaller amounts like done on your phone now have account details matching in place, large transfers such as mortgage repayments still do not!
And this causes a lot of problems. A common scam type involves gaining access to the email of a place that deals with large payments, real estate being popular, so they can change the numbers in an email before the customer is about to make a large payment. If the customer doesn't call to check the numbers, or if the scammers also put in a fake phone number, a large payment is sent to the scammers. One would think this is a thing that we can update, but the banking system often looks like some design features from the 1980s are still left in.
I was paying my tax one year on January 30th at some late hour. I was self employed at the time so it wasn’t a small amount. I was doing so via the phone bank as I didn’t then and still don’t do internet banking. I called up and spoke to a very nice lady who got the amount and that I’d be paying the HMRC which I had done before. She then read me the statement that the transfer would take approximately two hours and was not reversible once made. I said I’d understood that and she says
"Well that{s all done for you”
to my horror whereupon I said
"No it can’t be done I haven’t given you the new account and sort code for HMRC. They changed this year.”
She then said (as I’m hyperventilating and feeling faint)
”Oh I haven’t done the actual transfer yet."
She was very apologetic but that didn’t help my panicking much.
A couple of anecdotes about such things:-
Some years ago I needed to pay HMRC and I was up against a payment deadline. I went into my bank branch and was told I couldn't pay it without their paying-in slip. I asked why not. The clerk replied "Money Laundering Rules". I then said "Have you seen who it is that I am paying?" To which he had no answer.
For all this "protecting your money" malarkey, the banks don't make life easy. I wanted to transfer a sizeable amount of money into an NS&I account. They looked up the account number I gave them and they said "Ooh we have no record of this account, are you sure you wish to make this payment?" Funny thing is that if you wanted to make payment to Joe Bloggs, he's on their system. But UK's government-owned savings bank? Nah.
When I had double-checked the account details (have you tried ringing NS&I? Spoiler Alert: Don't). I had the same conversation again. "Are you sure?" "Yes" "If it's wrong we can't guarantee where your money will end up." "Yes, I'm sure."
A few days later, money hadn't been transferred. Bank says it's gone. I HAD to speak to NS&I. Noooooo. To be fair they helpfully told me that the bank hadn't quoted the account reference and so had gone into their suspense account pending return to my account. Complained to the bank, they paid me compensation for their cock-up.
Some weeks later... exactly the same thing happened, right down to the reference still not being quoted. FFS.
Lesson learned: Never PUSH money into accounts such as this. Much better to PULL it in by logging in to the beneficiary website and paying that way.
They looked up the account number I gave them and they said "Ooh we have no record of this account, are you sure you wish to make this payment?"
Who said that? you didnt say which bank the money was coming from .
Santander seems to be part of a new thing where they check the name given matches the account number at the other end , but it relies on all the banks joining up , and very few seem to have done that.
Actually I've had this problem with two banks... Santander was one of them. Plus another bank I have an account with who use a similar system, and had the same problem.
And don't get me started about Santander... I had a big problem verifying my identity with them one Friday lunchtime (by the time I left the branch, the queue for a cashier was out the door). Spoke to the complaints department at head office who totally agreed with my stance. Monday morning the woman who I had dealt with Friday (who turned out to be The Branch Manager) cheerfully completed the transaction using exactly the same documentation, without any further ado.
Something like this happened to me when I was forced by the building society to sell my home so that I could pay off the expired mortgage. The money was transferred to a non-existant account, and it took four days to find it and transfer it back. In the mean time, I was forced to camp out in an empty house that I was to begin renting, while my furniture was held in storage until the moving company had been paid. My solicitor tried to get the late payment penalty from the other party's solicitors (who had made the mistake), but they denied responsibility, saying that the bank should have checked the transfer and not let it disappear down a black hole.
You mean the way that you can setup a new bank transfer and then pay the new recipient £1000's in seconds and all the funky technology at the bank does not flag it as "out of pattern" or an "anomaly"?
Financial services is so deep in technology they appear utterly incapable of making proper use of it.
I know some people just cannot be helped, there are multiple warnings but even so it really pisses me off that the banks do so little to help these things.
A friend of mine's mother (the perfect target) got "the phone" call and the scrotes emptied her account whilst she was on the phone to "protect her against fraud".
There was no justifiable reason for the bank to allow those transactions as it was so blatant. On the plus side they did give her all the money back but it should never have happened.
Someone else a know had their son caught up in a hacked Instagram account with magical returned on Bitcoin.
Three transactions later over 3 days and all the money has gone, the usual pattern, small, quickly followed by a large one & and then the rest. Yes they were a total idiot BUT the banks should be doing more.
For God's sake, they were a Penal Colony.
I noticed some Muricans posting in an effort to assist this woman in her next fraud attempt with Trumpian excuses... "I didn't take NUFF'IN they gave those boxes to me to work on my memoirs."
Deceit is not always in words... sometimes it is in silence...
The crypto company made a mistake. If she'd just left it sitting in an interest bearing account, at the very least I'd expect her to be able to keep the interest as "compensation" for looking after the money for them. But she's been ordered to pay it all back AND interest. I wonder how they calculated that? The increase in value of the crypto? After all, no one pays interest on crypto. It just sits there goes up and down. Unless it's converted into "proper" money and put in a bank.
She wasn't paid in crypto, she was supposed to have been paid $100 for the sale of crypto, but they paid her $bank_account_number instead.
To be fair, she has probably made more on the value of the property than on the interest, although costs from selling will probably see her making a loss.
I wonder if some of the reason for that is that she didn't make any attempt to engage with the court (it was a default judgement). It's very possible that simply turning up and saying "I thought it was legitimate winnings from the crypto lottery" would have led to no interest being imposed. Judges take the law (and their time) seriously, and don't like it when others don't.
Those speed awareness courses are horseshit and don't change anything.
Also, they open the course by telling you some interesting statistics...such as most crashes and injuries occur from low speed collisions at T-junctions, at night, by people pulling out too early. My wife tells me that they don't mention this anymore. Also that 50% of speed cameras aren't even switched on etc etc. basically telling you that you were simply unlucky.
When I went, they went round the room to ask volunteers to explain their violation. Imagine how I felt when I found out most people were there for doing 50+ in a 40 zone at lunchtime. I was there for doing 24 in a 20 zone at 3am on a completely empty road on a Sunday. I felt like a right underachieving wanker.
As far as I can tell this had very little to do with crypto. She transferred money out to her own account and received more than can be expected. She obviously knew this and spent the cash as fast as she could. This could have happened with any bank or business transfer. And btw you can earn interest with crypto eithre through staking or lending platforms. The latter is highly risky as we have seen recently with platforms like Celsius blowing up.
In the early stages of internet banking I did a transfer for part of a house purchase. I split into 2 payments because of a maximum limit. There was no way of doing a test payment as you needed to enter the details each time. The first went through, the second didn't and when I looked at a printout I did I realised to my horror I had transposed 2 digits. Despite informing the bank straight away they were not helpful. Just said it wasn't a valid account so it would be returned in 2 weeks. Naturally after 2 weeks it didn't and I frantically had to chase it. Eventually it arrived with literally hours to spare before completion of the purchase. Wary of these system since.
Crypto.com have been laying off staff.
Interesting to note that for a large sum of money they are willing to go to the court to get refunded in dollars, yet when a user of their exchange makes a mistake that loses tokens Crypto.com are unwilling to accept any liability.
For example I transferred my last 1 Eth from Crypto.com to my coinbase Eth wallet, something I had done a few times before - except that being very tired I stupidly accepted the "default" option of using the Crypto,com owned chain "CRO" which means that my Eth magically vanished from the world.
Yes I accept it is my fault for not being careful enough to assume they would try to dupe me.
The fact that the same target wallet address on the cro chain isn't owned by anybody individually means that Crypto.com have my Eth by default and will not send it back.
You cannot reverse crypto transactions. It's also very hard to get support from any crypto exchange and harder to start legal action when they are based offshore.
Some good advice came from someone above, always test transfer the minimum amount and check it gets there before you send the rest.
In other advice, I'm right out of crypto now, back into shares - caveat emptor.
Going back a few years I got a massive pay cheque from my employers. As part of my contract I was paid £350 per week for being on call, someone entered 350 as the number of additional hours worked.
Result a payment of £20k that month…. When I went to the payroll department their first reaction was just give us a check for the overpayment! I told them to pull the money back, sort out the hmrc records and then pay me the correct amount
No I wasn’t going to keep the money as it was obviously wrong.
Obviously if you get a huge windfall, like this. You take it out and buy oats, lots of oats.
Next day you sell the oats under another name = no serial number on any oat I have ever seen. In effcy, she should have laundered the $$ now sho loses it all and pays 10% interest. Is she one of those millions of dumb bunnies in the outback?
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