Crypto Exchange Sues Woman After Sending Her $10 Million by Mistake (decrypt.co) 162
A woman received $10.5 million in an accidental transaction from popular cryptocurrency platform Crypto.com -- and then allegedly spent it on a luxury home, according to reports. Decrypt: Two sisters in Melbourne, Australia, are now being chased by the courts after going on a spending spree with the cash, 7NEWS reported Tuesday. A Crypto.com representative confirmed to Decrypt that the matter is currently "before the court" but would not comment further. Crypto.com, which is a Singapore-based exchange but also offers a Visa debit card, mistakenly sent the huge sum when Thevamanogari Manivel asked for a $100 refund back in May 2021, 7NEWS reported, citing court documents.
Now that sure inspires confidence. (Score:5, Informative)
As if more reminder were needed that crypto is not currency, a real banking institution would have been able to reverse a transaction like that within 24 hours, with or without the cooperation of the person receiving the erroneous transfer.
Re:Now that sure inspires confidence. (Score:5, Informative)
I think it was real currency, though. As much as I don't want to visit some crypto news website, I went ahead and read the article. I know, I know. I'm admitting to reading the article on Slashdot. Apparently what happened is that when processing her refund, someone entered an account number in the "amount" field rather than wherever they intended to enter it. (I'm guessing it was intended for a memo field.) Then, somehow, Crypto.com didn't notice for at least six months until an end-of-year audit caught it. (The refund was processed May 2021, and the mistake only noticed in December 2021.)
So, while this isn't exactly a cryptocurrency mistake, it's still not making Crypto.com look like a particularly competent institution.
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"it's still not making Crypto.com look like a particularly competent institution"
Are there any such crypto currency orgs? If so, that must be a very short list
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And there's your problem. The world doesn't take crypto currency seriously and it's nearly impossible to use it for what it is intended for. Which is a currency. So, it literally serves as no purpose other than playing it like the futures market. What is a currency that can't be used as a currency? Answer: not a lot.
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Re: Now that sure inspires confidence. (Score:2)
"Unlike the dollar, it is not centrally controlled, can be anonymously transacted, and is virtually immune from inflation due to the mathematical certainty of its creation over time."
Bullshit. It is controlled by the programmers of the protocol and network. This is proven with forking (done by one of the original devs.) Anonymous transactions ONLY in the network - conversion to real world fiat currency almost always require KYC.
Virtually immune. Anytime someone uses "virtually proof" as a claim, someone fin
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Anytime someone uses "virtually proof" as a claim, someone finds proof against.
Virtually means "not really," so this should be expected...
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" virtually immune from inflation"
Virtually immune from stability
FTFY
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Well, it's suffered about 300% inflation since March.
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Apparently that is not the case here:
Victoria’s Supreme Court has ordered the home to be sold and the money returned, according to the report.
Re:Now that sure inspires confidence. (Score:4, Insightful)
That's how it would go down in most places. The bank cannot reverse the transaction, especially not after 6 months later, but
Lawsuit with Unjust Enrichment claim will end up occuring provided the error is discovered within the statute of limitations. If someone is Enriched by a lot of money at the expense of another without a legal justification for the enrichment, The one at the loss is going to pursue them in court.
If the payment enriching party A was made in error, then that is a circumstance the law considers unjust.
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Boo hoo. She knew the money wasn't hers.
That depends on the law. Where midnight deadlines apply, and banks fail to meet them, money accidentally paid out legally would have been hers. In this case, it took them 7 months to notice.
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They're not a bank. They insist.
So if Random Corp sends you a big cheque do you get to keep it? If someone mailed me ten million I think I'd take a little trip to a small tropical country to deposit it.
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Even if it's not unusual for this company to make big transactions, it'd be odd if their systems don't trigger verification requirements for refunds unusual for a given customer. Perhaps a threshold for an account, based on balances/transactions? It may be perfectly fine to issue a $10 million refund to a customer routinely running millions through your books.
Sloppy systems/processes.
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I find it unbelievable that a single employee can type in an amount up to...
Quite obvious now that most if not all crypto exchanges have mickey mouse IT systems that were quickly cobbled together at the cheapest cost possible.
Now, go figure why such systems are error prone and easy to hack.
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It's a cryptocurrency exchange. They're always getting ripped off for billions. A mere ten mil doesn't even register. I'm surprised they bother with year end audits, honestly.
Re:Now that sure inspires confidence. (Score:5, Informative)
This sort of thing happens quite often. Not usually this much money, but money sent to the wrong account, or in the wrong amount.
I'm the UK it's down to the recipient how much of a pain it is. If they agree to just send it back, no problem. If they do refuse, you can sue them but it takes a very long time and isn't cheap.
If it's an international transaction you are pretty much screwed.
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Back when Solomon Smith Barney was sending me printed paper checks, if the amount exceeded 250,000 $ there will be multiple signatures and verification stamps. To transfer 10 million without verification or triggering alarms... It is even possible the employees were pilfering from the system for a long time, this Thevamanogari Manivel was not the real payee. The employee stealing from the company sent it to wrong person. They might have been using burner accounts
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> As if more reminder were needed that crypto is not currency
I paid for cash for a prostitute yesterday, and I tried to ask for a refund....
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You're not a banking institution either. Of course there's no reasonable need for you to be one, and it's certainly not expected. But plenty of people think crypto is safe and not just a bunch of electron pushing that is frequently of no practical value at all. They have neither the abilities nor the responsibilities of banking institutions, and one consequence is "leaks" like this -- or someone running off with half a billion dollars' worth of a cryptocurrency.
I've stopped following chess because it seems
Re:Now that sure inspires confidence. (Score:4, Interesting)
As if more reminder were needed that crypto is not currency, a real banking institution would have been able to reverse a transaction like that within 24 hours, with or without the cooperation of the person receiving the erroneous transfer.
According to the article, this was supposed to be a $100 refund on a Visa debit transaction. That would appear to make this actual banking and banks are supposed to have certain rules. I know in the US the traditional rule was that the banks only have a certain amount of time (I think something like a week, with a midnight deadline) to correct a bank error in your favor before it becomes your money, and there was no requirement that you notify the bank of the error. They're a bank, they're not supposed to make that kind of mistake, and if they do, and they don't catch it, they're basically fining themselves. Apparently, this happened from an employee putting the account number in the payment section. It happened in May of 2021 and they did not notice until a routine audit in December that year. That's clearly an unacceptable amount of time. Now, it's possible that Australian laws on bank errors may be different (and, indeed US laws may be different now too), but it's also possible that the courts are simply ignoring the law and applying some other principle to return the money to the bank.
Re:Now that sure inspires confidence. (Score:4, Insightful)
The banking rules and time limits just mean there's no longer a way for the bank to pull back the money against the wishes of the recipient. It doesn't mean the recipient is legally entitled to the funds and they can be sued for the return of the money.
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That may well be the case. I'm definitely not a lawyer. Another poster was discussing civil suits for unjust enrichment and I looked into it some more and there's a whole lot of stuff about "quasi-contracts" which is a controversial subject that dates back to Roman law. Honestly it's all a bit vague and confusing. The basic ideas are outlined but a strict reading of the rules would seem to, among other things allow someone to sue if they sold stock or property that subsequently sharply increased in value.
Al
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The recipient is in Australia. Case law is quite clear on that, they are only entitled to the money if they can conceivably show the mistake was expected and that they thought they were actually entitled to the money.
I.e. Bank transfers you $150 instead of $100, it's yours to keep. Bank transfers you $10000000 instead of $100 it's the bank's to legally claim back.
Bonus points for these people going on a rush spending spree to get the funds out of the account to make them look extra guilty.
They will lose thi
you have to send it back (AUS law) (Score:2)
Here you go.
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I should note that the site you're linking to is not a government entity, it's brokerage agency for financial companies. They have a vested interest in promoting that information and shaping public opinion. It's like going to Parker Brothers for the true story of the origin of the Monopoly board game. They've been publishing the story that a heating engineer invented the game and sold it to Parker brothers for decades and they're not going to change their story just because it was proven in court that the h
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for example, it may actually be entirely legal to take the money and play the stock market and keep any profit you earn and, if you lose money, to only pay back what you have left.
No it's not. You're only entitled to any money in Australia if you show that you conceivably thought you were entitled to it and couldn't recognise the mistake.
If the bank sends you $150 instead of $100 it's usually yours to keep. If they send you $10million instead of $100, then you owe the bank $9,999,900 when they ask for it, what you do in the meantime is entirely irrelevant. It's actually possible for the bank to claim back interest as well if they prove the victim knowingly held money they weren't ent
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As if more reminder were needed that crypto is not currency, a real banking institution would have been able to reverse a transaction like that within 24 hours, with or without the cooperation of the person receiving the erroneous transfer.
Errr no, there are plenty of similar incidents like that with normal banks too. I mean crypto is not a currency for other reasons, but your post is objectively incorrect.
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In what jurisdiction is this true? Actual citation, please. The laws I have seen are all clear that keeping 'lost property' is larceny. And 'lost property' is defined as receipt of property you know you are not entitled to.
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If you send me cash in the mail by accident, I have no obligation to return it to you either, this was an irreversible transaction error, perhaps they'll be more careful next time.
Well if the sender can show evidence they accidentally mailed you $1 Million in cash and you profited from it at your expense without a legal reason for you to profit (Such as them owing you the money due to contract), Then they can in fact sue you for your gain in position and win whatever your total gain is back in restitu
code is law (Score:5, Interesting)
Aww, whats the matter? Code is only law when it hurts someone other than you?
If your protocol cannot reverse the charge and you made the transfer then I guess you are out of luck, you gave the money away and no one owes you anything. Own your mistake, own your shit system. Crying to the courts goes against everything you've built and done up to the point of your mistake. There is going to be more pain as you figure out why systems and regulations work the way they do. Enjoy your dog food.
for $10M they put an mob hit on her! (Score:2)
for $10M they put an mob hit on her!
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When I was very young with a crappy job I deposited my tiny paycheck at the ATM in the amount of something like $63.00. Unbeknownst to me, that somehow became something like $63,000,000.00 (some hungover clerk presumably leaned on the zero key), so that the next time I tried to make a withdrawal I couldn't get any money out of my account, even though a tiny bit of it was legitimately mine. They erred on the side of caution and locked me out completely.
The really interesting part was when they had me take t
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It would definitely be chaos even if it only looks like a number. Banks are required to have cash equal to a certain percentage of their total deposits and they may have had to scramble quickly or else come up with millions in cash quickly.
https://en.m.wikipedia.org/wik... [wikipedia.org]
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Re:code is law (Score:5, Interesting)
Says who? Here in NYS the definition of larceny includes:
B) By acquiring lost property
A person acquires lost property when he exercises control over
property of another which he knows to have been lost or mislaid, or to
have been delivered under a mistake as to the identity of the recipient
or the nature or amount of the property, without taking reasonable
measures to return such property to the owner;
Re:code is law (Score:5, Insightful)
My personal moral code obligates me to give it back.
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I promise you, there is no argument where you get to keep the money.
While that's true.. If you spent the money and didn't keep any kind of "gain" as a result the error, and didn't leave money in the account, then they can't pull it back (other than by trying to sue the account holder). In that case the bank, if it takes them too long to discover the error, then by then they may not have an argument left where you would be required to pay it to them. They can make claims regarding errors, but every
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Had the sisters made the mistake, they would be shit out of luck. For instance, had they fat-fingered a bad trade.
Responsibility for errors is a one-way street.
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It's been a lot of years and beers since I took contract law, but as I remember, if you accidentally lose something it's not finders-keepers. As opposed to intentionally tossing something in the dumpster makes it fair game.
Whether it's tangible property or a wire transfer or crapto makes no difference. The recipient made a HUGE mistake.
And I don't know how it works in Australia, but here in the U.S., the IRS and FBI would have a lot of questions about where the money came from.
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There are mistakes all around. The crap article doesn't actually say what happened but leaves us guessing.
The money looks like a gift. As long as you pay the appropriate taxes I'm not sure the tax man cares.
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Well, the IRS / FBI wou
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Also, if you go to a store, and pay for something with cash.
The cashier gives you too much money back in change...you are under no obligation to give it back and call their attention to it.
Actually, you are legally obligated to give it back. But you will get away with it because (1) it's an anonymous cash transaction, and the store doesn't know who to go after for recovery; and (2) unless the cashier used $100 or $1000 dollar bills instead of ones to make change, the magnitude of the error is too small to bother trying to figure out who the culprit is.
The real question in this case is not whether you're entitled to keep the money; it's how morally bankrupt does someone have to be to do this a
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Aww, whats the matter? Code is only law when it hurts someone other than you?
If your protocol cannot reverse the charge and you made the transfer then I guess you are out of luck, you gave the money away and no one owes you anything. Own your mistake, own your shit system.
This would probably have been the result if she didn't ignore the case and lose by default.
How many lawyers for $5 million (Score:2)
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Thieves don't like it (Score:5, Insightful)
Really comes down to what terms she agreed to... (Score:3)
Here's a question... (Score:2)
She asked for $100 and got $10,000,000.
Where did the $9,999,990 come from? The where determines how this is recovered, since the excess refund isn't Monopoly money.
And I would wonder further if crypto.com has $9,999,990 to spare, being at the least intended to solve other problems.,..
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Exactly. How do you misplace $10M and not notice it for 6 months? At the very least that amount of money should be in an interest bearing account.
People think real life is like Monopoly. (Score:2)
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The "bank" didn't notice or care for SIX MONTHS. How long would you wait to return free money? A year? Two years? At this kind of time frame I'd say that if she declared and paid taxes for it then it's hers.
Re:People think real life is like Monopoly. (Score:5, Informative)
You don't wait. You contact the bank. Or a lawyer. If it's so blindingly obvious this is NOT your money, do not spend it.
That just makes you a fucking moron.
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Just because something is one your property, does not mean you automatically own it. Even things like 'this car is illegally parked in my driveway!' does not mean you get to keep the car.
Re:People think real life is like Monopoly. (Score:4, Interesting)
Right, you instead place a lien on the car for improper storage, perform a lien sale, get a new title, and register the car at the DMV. Now it is your car.
There must be a process for the 10 million right?
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I mean, if I buy a painting at a garage sale..I pay $20.
I take it home and later I find out it is actually a lost Picasso, worth $14M and I sell it to a museum.
I'm not obligated to tell the garage sale folks they sold it too cheaply.
Hell, let's say you are at said garage sale AND you as an expert notice right then and there it is a lost Picasso and knowing this, you grab it and pay the $12 price the seller has on the
Re:People think real life is like Monopoly. (Score:4)
You are responsible because the law says you are responsible. If you receive (or find) something knowing it does not legitimately belong to you you are obligated to make an attempt to inform the other party and return it. Otherwise you have committed larceny.
Your garage sale example does not apply because the Picasso DOES legitimately belong to you, you bought it for an agreed price. In that case, the seller just made a bad decision, that is not your responsibility.
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no sympathy (Score:2)
finders keepers (Score:2)
Except no, that's not how it works. if you get something worth $10M and didn't exchange something in return, then there is no contract. The original owner can claw it back in almost any jurisdiction in the world.
IANAL but if you found a bunch of money or crypto in your account. Or piles of gold bars, box full of graphic cards, whatever on your door step. I recommend contacting the owner and ask them to write you a receipt and see what they do. Do not go out and spend it. It's far less of a hassle to return
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Except no, that's not how it works. if you get something worth $10M and didn't exchange something in return, then there is no contract. The original owner can claw it back in almost any jurisdiction in the world.
IANAL but if you found a bunch of money or crypto in your account. Or piles of gold bars, box full of graphic cards, whatever on your door step. I recommend contacting the owner and ask them to write you a receipt and see what they do.
Or maybe you should write them a receipt for services rendered?
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In the UK if you receive something you didn't ask for, it's yours. It's to stop scams where they send you something and then demand payment, saying you must have ordered it.
So if a box of graphics cards arrives with your name on it, it's yours. Legally considered a gift.
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The US has a similar law. However, in BOTH cases that law only applies when the sender INTENTIONALLY sent the item to the recipient. The exact wording from the UK law is "The circumstances referred to in the preceding subsection are that the goods were sent to the recipient with a view to his acquiring them".
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While you're technically correct, you're referencing the wrong law. The applicable one in this instance is the Theft Act (1968) not the Unsolicited Goods and Services Act (1971).
For a fuller explanation see this page [money.co.uk]
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In the US and UK a gift is without considerations and can be reversed, as there is no contractual obligation and centuries of common law precedence have established this as legal fact.. In short, if it's a gift it is not really yours. Now there may be consumer protection laws that recognize certain categories of transactions as non-revocable and these laws are probably a good thing.
The serving of documents is more interesting (Score:5, Interesting)
The crypto company served the defendant by sending her an email with link to a OneDrive file.
The link was set to expire after 30 days.
So how do you prove:
1. She was legally served?
2. That the OneDrive file actually contained a legal document?
3. That the document has not changed over time?
#1 is sort of answered by the judge giving a default judgement. Obviously the judge was convinced that the defendant was served.
Stupid (Score:2)
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It was SIX MONTHS.
I agree the women should have made the effort to return it.
But half a year?
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You might argue a moral reason for them to return it, but what legal reason should they have?
They did nothing to try to steal anything, it was dumped on them....I say finders keepers.
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IANAL, but the Unjust enrichment [wikipedia.org] and restitution would apply. Courts have ruled that a party getting money that they are not supposed to get must return the money. The key words are "not supposed" to get. There was a case a few years back where Citibank accidentally paid $900M instead of $7.8M on behalf of their client Revlon and sued to get the money back.
The court ruled against Citibank [jdsupra.com] because the recipients were supposed to get the money. The $7.8M that was supposed to be paid was the interest amount
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Brought it up elsewhere.
Tax implications.
Imagine this period straddling tax seasons.
All of the sudden, your bank is reporting to the IRS that you're $10M richer.
What's your tax load gonna be in January?
I agree it should have been paid back.
Now imagine someone coming to you, months (or years) later going "Hey! We paid you way too much, a long long time ago. You need to give us that money back. Oh yeah, it was MILLIONS OF DOLLARS."
Not saying they should have kept the money.
But the person getting the deposi
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Now imagine someone coming to you, months (or years) later going "Hey! We paid you way too much, a long long time ago. You need to give us that money back. Oh yeah, it was MILLIONS OF DOLLARS."
1)It was six months. 2) Unjust enrichment which is a thing in Australian law.
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Because if someone's wallet falls out on your lawn, you aren't entitled to spend their cards dry.
The same basic concept applies to mistaken deposits from a financial institution.
Granted, SIX MONTHS is an INORDINATE amount of time to have left it.
And something like this could SERIOUSLY mess up one's finances depending on when in the tax year it drops.
Imagine this happening in early August.
Now what happens when your bank reports this to the IRS for taxes in January?
Capital gains on it could hit you for nearly
Fraud is illegal. (Score:4)
They knew it was the wrong amount, didn't attempt to get it corrected, and spent it. That's one of many types of deception covered under fraud laws. They knew about the error and kept quiet about it for their own gain.
If they had contacted the company, said that they thought there might be an error, and received a message back from the company saying it was not an error or that they could keep it, in that case the email should be printed and framed since the message would be worth $9,999,900.
Based on the story alone, the women will lose badly. Fraud from the crypto currency transaction, fraud from not reporting for taxes, fraud for spending money they knew wasn't theirs. They will probably lose both civil suits and the criminal suits that will soon follow.
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I don't get it, you're saying this is like some sort of "Good Samaritan" Law?
Neither of these two did anything actively to try to cheat this company out of money. They didn't submit anything fraudulently, or try to con anything or tell mistruths.
Are you saying we are now under an obligation
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>I'm sorry I believe fraud takes overt action and that merely being silent about something is not fraud.
Spending the 10 mil is the "action" you are looking for.
What makes this interesting is that it's crypto, not a bank.
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Neither of these two did anything actively to try to cheat this company out of money. They didn't submit anything fraudulently, or try to con anything or tell mistruths. ... Are you saying we are now under an obligation to tell a person or entity when that person or entity does something stupid or makes a mistake?
In most countries of the world, yes, you are legally obligated to report major financial errors once discovered. The same laws that protect customers when you overpay the company also apply to the company, they protect the company when they overpay you. Once an error is noticed the other party needs to be notified and it needs to be addressed. It doesn't matter which direction the money moved, if one party knew about a significant error and failed to disclose it to the other, that's illegal.
There are a bu
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"Please government, save us!" - CryptoBros (Score:2)
The real story is how people who pretend their scam exists to circumvent gov't control quickly run to the gov't for help when things don't go their way. I don't remember reading the litigation section in the Bitcoin whitepaper.
What happened to the old law? (Score:3)
I know this article is about Australia, not the US. But there was a similar case here recently, so...
Back in ye olden days there was a particular form of postal fraud where the scammer would send you stuff unsolicited and then demand payment after the fact. Sometimes they'd fire off a lawsuit or just a lawyer's nastygram if you didn't comply. To combat this, it used to be the law that is someone sent or gave you anything you didn't ask for, it became yours free and clear. If you didn't actually ask for it, you owed no compensation, there were no takebacks possible for the scammer, and certainly no lawsuit or criminal charges if you kept it, used it, trashed or did anything else with it that struck your fancy. Obviously, the law was repealed or struck down at some point, since this sort of incident has been hitting the news in the US recently. (And it was probably never the rule in Australia in the first place.)
But when the hell did things change? I mean... it is very obvious why... big companies wanted to cover for their moments of incompetence or malfeasance and bought themselves some legislation from pliant congresscritters who declared in one united voice: "To hell with the people and consumers. Quarterly earnings filings are on the line!" But the repeal of this should have been BIG FUCKING NEWS! Especially considering the prevelane of online scams these days, the potential for abusive shenanigans... as in this story and the others on the US side... is massive. It was a very valuable consumer protection and people should have been screaming bloody murder about it being removed.
Re:What happened to the old law? (Score:5, Informative)
Nothing changed. If someone INTENTIONALLY sends you something, you can keep it, even if you didn't ask for it. If someone ACCIDENTALLY sends you something it becomes 'lost property' and you must return it.
Customer or Accounting Dept (Score:2)
When you are a customer of Crypto.com, are you also a member of their accounting department, too?
Too greedy (Score:2)
They should offer to settle (Score:2)
Processing Fee (Score:2)
"Sure, I'll return the money. My processing fee is 10%."