Crypto Trader Faces Investigation for Receiving $585K Excessive Refund from Exchange

A crypto trader encountered an unusual scenario when he received a refund from a crypto exchange exceeding his entitlement by approximately USD 585,000. Despite the discrepancy, he failed to return the surplus funds promptly.

When the crypto exchange detected the error, the trader had already withdrawn the excess amount. OTCPro, the crypto exchange, revealed that the total sum involved was around USD 650,000.

Crypto Trader Forced to Give Back Incorrect Refund

A recent report revealed that the Victorian Supreme Court in Australia has issued a freezing order on crypto trader Kow Seng Chai’s account.

The report clarifies that Chai initially deposited funds into a trading account, but due to an error by the exchange, he received a significantly larger sum.

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However, when the exchange recognized the mistake, Chai had already converted the excess funds into Tether and transferred them to alternative accounts.

In many jurisdictions, failing to declare an incorrect payment, like an inaccurate refund amount, constitutes theft.

An Extra Zero Was Accidentally Added to Account

Chai had originally deposited $65,000 USD in late January. However, the oversight of the additional zero in the refund remained unnoticed until early February.

Shaanan Cohney, a Melbourne University Lecturer in Cyber Security Computing and Information Systems, weighed in on the situation, expressing skepticism regarding the possibility of recovering funds in similar circumstances.

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However, he noted that Chai’s proximity to the exchange in Australia could make recovery more feasible.

“Normally the person who is sent the cryptocurrency funds disappears into the ether. And that’s the end of the story.”

This isn’t the first time an Australian crypto exchange mistakenly refunded a larger sum to a user.

In September, Crypto.com erroneously transferred $10 million to a user’s wallet instead of a $100 refund.

The user was arrested for purchasing extravagant property with the funds before boarding a one-way flight to Malaysia.

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