The cryptocurrency exchange OTCPro is trying to recover the funds mistakenly sent to the account of its user named Kou Seng Chai, who is now in hiding and does not respond to emails and phone calls.
The user has also failed to appear in court, where he was summoned by the crypto exchange's lawsuit.
It is reported that in January, OTCPro mistakenly credited the user with AU$995,000 instead of AU$99,500, meaning that the recharge amount was exactly 10 times higher and the exchange's losses amounted to $328,000.
OTCPro explained that the money was stolen after a technical error that added an extra zero to the amount of Kou Seng Chai's transaction. This happened on January 25, 2024, reports Cointelegraph.
The exchange only discovered its mistake on February 4 and has been trying to contact Kou Seng Chai ever since, but to no avail. He did not respond to emails and phone calls requesting a refund. At the same time, one of the calls was answered by a man who said it was not Kou Seng Chai's number.
In addition, it became known that the user immediately purchased Tether (USDT) with the funds received, after which he withdrew $100,000 daily from the exchange, the maximum amount possible, and withdrew $626,700 in 10 days.
Rhino Trading, which owns the OTCPro exchange, has appealed to the Victorian Supreme Court. Court documents also allege that the user immediately transferred funds to Tether before withdrawing them from the exchange.
The High Court froze Kow Seng Chai's assets on Feb. 9 and ruled on Feb. 21 that he could not leave Australia.
Justice Michael Osborne said in his ruling that the order to freeze Chai's assets was made because there was a "real risk of asset sales." He is also barred from leaving the country.
The cryptocurrency exchange suffered a loss of nearly $322,700, minus the user account balances.
Interestingly, the cryptocurrency exchange Crypto.com made a similar mistake earlier. In May 2021, an employee of the exchange transferred $6.86 million instead of $100 to Australian users, a couple, Thevamanogari Manivel and Jatinder Singh. As it turned out, the employee mistakenly entered their account number in the "amount" field of an Excel spreadsheet.
The users allegedly considered the accumulated funds as prize money and immediately began spending the money on luxury goods, cars, and gifts for family members. Singhu will stand trial for his case in Melbourne in March 2024, while Manivel has already been sentenced to 18 months in jail in September 2023.