Why Is This Crypto Trader Forced to Pay Back Exchange Refund?

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When the crypto exchange detected the error, the trader had already withdrawn the excess amount.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, attributed to an additional zero in his deposited funds.

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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 and knowingly accepting an incorrect payment, like an inaccurate refund amount, constitutes theft.

Chai had originally deposited $65,000 USD in late January, and 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.”