As someone who’s spent a significant part of my career navigating the often turbulent waters of the cryptocurrency world, I can’t help but shake my head in disbelief when stories like BlockFi’s fat-finger fiasco cross my path. It’s a tale that perfectly encapsulates the rollercoaster ride that is crypto – equal parts exhilaration and confusion, with a healthy dose of ‘what on earth just happened?’
The infamous “fat-finger” error is a humbling reminder that the crypto sector is still vulnerable to human goof-ups, no matter how futuristic crypto feels.
An “oopsie” or “slip of the finger” mistake refers to an unintentional error made by a user while entering data related to cryptocurrency transactions, often due to typographical errors. These mistakes can lead to significant financial losses or incorrect calculations.
Frequent errors involve unintentionally including an additional digit, possibly even two, or mistakenly transferring all your savings into a different wallet.
2018 saw an instance of human error, not exclusive to the crypto world, when Samsung Securities inadvertently rewarded its employees with 1,000 shares of their own company rather than the intended cash dividend of 1,000 Korean won ($0.72) per share.
2.83 billion shares, valued at approximately 112.6 trillion won ($150 billion), were disseminated as an error. Most of these shares were recovered, but certain Samsung employees attempted to cash in on their shares, causing a significant drop in the value of Samsung Securities’ stocks. This event sparked controversy among investors, regulatory bodies, and Samsung’s workforce.
One key difference with crypto, however, is that transactions are immediate, irreversible and anonymous, leaving participants with limited options to reclaim an erroneous transfer. Furthermore, unlucky mistakes are visible to anyone on public blockchains.
From hilarious mix-ups to costly mistakes, here are six notorious crypto fat-finger moments.
Crypto mix-up recipients go all-in on millionaire lifestyle
Back in May 2021, there was an error with Crypto.com where they accidentally deposited AUD 10,470,000 (equivalent to $6,860,000 USD) into the account of Australian couple Thevamanogari Manivel and Jatinder Singh, instead of simply giving them a refund of 100 AUD.
The error occurred when an employee allegedly entered an incorrect account number into the payment section of an Excel spreadsheet.
During an internal review in December 2021, the error was uncovered. By then, Singh had already bought several houses and bestowed a friend with approximately 1 million AUD ($660,000), asserting that he believed he had won a windfall from an online lottery.
Yet, it seemed clear that Singh’s statement was an obvious attempt to deceive, given that Crypto.com Compliance Officer, Michi Chan Fores, unequivocally refuted the suggestion of any such promotion existing.
After admitting to theft offenses, the newlyweds’ luxurious honeymoon trip came to a halt. Singh received a sentence of three years in prison, while Manivel was given an 18-month community supervision order without any jail time.
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County Court Judge Martine Marich justified her decision to imprison Singh by stating that while he admitted guilt, he persisted in accusing Crypto.com and the Commonwealth Bank for the error in funds transfer. The judge also took note of Singh’s cognitive difficulties, such as an “exceptionally low” IQ, which made it difficult for him to fully comprehend the legal consequences of his actions.
$23.7 million gas fee blunder finds a kindhearted miner
Last September, the decentralized finance trading platform known as DeversiFi, now Rhino.fi, mistakenly shelled out a $23.7 million fee on one of its transactions.
The user aimed to cover a small gas charge, but due to a software glitch, an excessively large fee was charged instead. Upon investigation, it was found that problems with the EthereumJS library occurred at the same time as changes in gas fees from the EIP-1559 update, resulting in unusually high transaction costs.
However, DeversiFi was in luck, as the miner who received the fee refunded the total amount.
As an analyst, I leveraged the transparent nature of Ethereum’s blockchain to trace the miner responsible for block 13307440, where the error in transfer occurred. This miner had a pattern of depositing Ether (ETH) into Binance, enabling us to establish contact through the cryptocurrency exchange.
In about an hour, the team felt a sense of relaxation as the miner handed over the complete sum, except for 50 Ether (approximately $190,000 in value) which DeversiFi was willing to provide as a reward.
But not everyone is so fortunate, as sometimes anonymity can tempt crypto users into greed.
DeFi bug hands out $90 million in COMP tokens
In October 2021, a glitch in an update to the popular decentralized finance (DeFi) platform Compound Finance led to an exceptionally generous distribution of tokens to its users.
The issue stemmed from a small code error that resulted in the misallocation of funds, enabling users to claim $90 million worth of COMP (COMP) tokens.
Compound Finance serves as a platform where users can lend their cryptocurrencies to earn interest. Unfortunately, due to a technical glitch, some fortunate users were mistakenly given large amounts of COMP tokens, equivalent to millions of dollars in value.
In spite of appeals from the protocol’s guidelines and threats from its founder, Robert Leshner, to report non-compliant users to U.S. tax authorities, some users opted to liquidate their holdings instead of returning the tokens.
Leshner outlined that the company found itself incapable due to a lack of administrative controls or community features to halt the dissemination of COMP.
700 BTC promo makes temporary millionaires
Back in May 2021, BlockFi, a company specializing in digital asset lending, accidentally launched an exceptionally attractive promotion within the realm of cryptocurrencies.
BlockFi launched a special offer involving the stablecoin Gemini Dollar (GUSD). This promotion rewards select customers by offering extra incentives if they keep a specified amount of U.S. dollars within their BlockFi interest-bearing accounts, thereby providing additional benefits to users.
Unfortunately, due to an unintentional mistake, BlockFi inadvertently transferred Bitcoin (BTC) instead of GUSD to certain users. A handful of these recipients even received as much as 700 BTC.
Although many crypto transactions were rolled back, approximately 100 customers successfully sold the mistakenly obtained Bitcoins.
Despite finding itself in a troubled situation, the company continued to face criticism because, as reported by some users on their official Reddit forum, the company falsely accused those users who were not involved in trading or selling Bitcoin of misconduct and even threatened them with legal action.
1 User stated, “Blockfi made a mistake… Two days following this error, I initiated a withdrawal… This action had no connection to their allegation. Subsequently, I received an email from them, claiming I withdrew funds that aren’t mine, labeling it as fraud and a criminal act they will pursue if not returned.
“Fuck you, it’s my money.”
BlockFi’s error significantly tarnished their reputation, leaving a mark that was challenging to erase. Subsequently, the company filed for bankruptcy in November of 2022.
Suspicious fat fingers
In the context of a slip of the finger, it’s often assumed that an error has occurred unintentionally. Yet, in some cases, these seemingly accidental events can be deliberately orchestrated as a cunning method for laundering money, disguising illicit activities as legitimate transactions.
A frequent practice observed is accidentally paying excessive transaction fees for transfers, such as the incident that happened on August 12, where an unidentified user inadvertently paid approximately $90,000 in gas fees to transfer $2,200 worth of Ether.
The method involves the user working together with the transaction verifier, ensuring that the fee payment is properly included in the appropriate block submission.
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As a researcher delving into the world of cryptocurrency staking, I recently uncovered some intriguing findings from our October 2023 report. Specifically, at Northstake, we discovered that illicit and high-risk activities on three Ether staking protocols and specific regions within the mainnet varied between approximately 0.46% to 1.56%.
Despite appearing somewhat modest, Northstake emphasized that the figure is significant enough to trigger alarm bells among financial institutions contemplating participation in staking, due to potential risks.
Standard clumsy fat-finger mistakes will always exist
Although mishaps made by wealthy individuals, known as ‘fat-finger errors,’ tend to make headlines, less significant mistakes happen quite regularly and typically go unnoticed.
Initially, PrincePablos believed he had purchased an NFT art piece for just 0.021 BTC, which equated to around $1,287. However, the unexpected revelation came post-transaction when the buyer discovered that the NFT was actually listed at a much higher price of 0.21 BTC, equivalent to approximately $12,877.
Without fully comprehending the implications, PrincePablo unwittingly catapulted himself and his NFT into notoriety, serving as a warning tale for others. In other words, due to an unintended mistake, PrincePablo has gained unexpected fame, earning him the title of “accidental internet sensation.
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2024-10-23 18:36