In May 2021, Jatinder Singh tried to deposit just $65 into his account. Crypto.com A Crypto.com employee deposited $65 into his account using his partner’s bank account. However, due to a discrepancy between the exchange’s records and the bank account details, Crypto.com rejected the deposit. Instead of returning the $65 to Singh’s account, a Crypto.com employee made a “major accounting error” and inadvertently returned a staggering $4.42 million.
This wasn’t the first time Crypto.com had suffered such a blunder. In August 2022, the exchange mistakenly sent $10.5 million to a customer who only owed him $100, sparking a legal battle. Later that year, Crypto.com also mistakenly transferred $400 million worth of Ethereum to the wrong address.
Consequences: Singh’s Overspending
With the $4.42 million windfall, Singh and his partner, Thevamanugar Manivel, embarked on a spending spree that eventually led to their downfall. The couple bought two houses and two plots of land in Melbourne, Australia, and gifted a friend $650,000.
But Crypto.com’s mistake wasn’t discovered until seven months later, during an internal audit. By then, Singh and Manville had already spent a significant portion of the money. When the exchange realized its mistake, it contacted the Commonwealth Bank, which told Manville to return the money.
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The legal battle
Despite her suspicions that the refund was a scam, Manivelle transferred $2.6 million into her bank account. The move eventually led to her arrest when she attempted to board a one-way flight to Malaysia in March 2022.
In a shocking turn of events, Singh pleaded guilty to stealing $4.42 million in the County Court of Victoria, Australia. His lawyer claimed that Singh did not realize the seriousness of his actions, and he is now awaiting sentencing.
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Manivelle, on the other hand, was sentenced to 209 days in prison. However, the court deemed her prison sentence had already been served, as the couple spent nearly a year in custody. She was also placed on an 18-month community corrections order last year, after pleading guilty to recklessly handling the proceeds of crime.
Lessons Learned and Industry Implications
The Crypto.com refund blunder is a cautionary tale for the cryptocurrency industry. It highlights the importance of strong security measures, rigorous auditing, and comprehensive employee training to prevent such costly mistakes. The incident also underscores the need for clear and transparent communication between exchanges and their customers, ensuring that any errors or discrepancies are addressed promptly.
Furthermore, this case highlights the potential legal consequences that can arise from mishandling funds, even if the recipient is not directly responsible for the error. It serves as a stark reminder to all participants in the cryptocurrency ecosystem to exercise due diligence and integrity when dealing with digital assets.
Conclusion
The Jatinder Singh case and Crypto.com’s massive refund blunder are a cautionary tale that underscores the importance of diligence, security, and integrity in the cryptocurrency industry. As the sector continues to evolve, it is critical that all participants, from exchanges to individual investors, remain vigilant and committed to maintaining the highest standards of responsible practice. Only then can the promise of digital assets be fully realized, and the crypto ecosystem can thrive in a safe and trustworthy environment.
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