Another crypto shocker: Major player actually corrects $400m mistake instead of cratering
- Reference: 1668429005
- News link: https://www.theregister.co.uk/2022/11/14/cryptodotcom_gateio_400m/
- Source link:
The accidental recipient, Gate.io, released a [1]statement detailing how it caught on to the October 21 320,000 ETH ($416 million) accidental deposit:
This large-amount entry triggered the security audit mechanism of the Gate.io platform, which was intercepted by the risk control system. After communicating with Crypto.com and confirming that it was an operation error transfer, we immediately started the asset return process and assisted in returning all the wrongly transferred assets.
Gate.io wasn't the only one who spotted the error. After Crypto.com CEO Kris Marszalek [2]tweeted the company's cold wallet address, another Twitter user [3]expressed curiosity as to why Crypto.com would send 82 percent of their Ethereum to Gate.io and why Gate.io would send 285,000 ETH back five to seven days later.
Marszalek chimed in with an answer: it was intended for a new cold storage address, but was accidentally sent to a whitelisted external exchange address instead.
It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring. — Kris | Crypto.com (@kris) [4]November 13, 2022
Now that's a big oopsie.
[5]Australia asks FBI to help find attacker who stole data from millions of users
[6]BitConnect boss accused of $2.4bn crypto-Ponzi fraud has disappeared
[7]How a crypto bridge bug led to a $200m 'decentralized crowd looting'
[8]Go ahead, be rude. You don't know it now, but it will cost you $350,000
Recovering currency is an unusual success in the crypto world, in which errors usually see investors left with only smoking craters to survey.
Crypto.com once accidentally [9]sent an Australian woman $7.2 million instead of $68.50 after an account number was accidentally entered into the payment field. She was eventually ordered to return the money with interest and costs.
Cryptocurrency bridge service Nomad was drained of $190.7 million as part of what could be described as decentralized looting when vulnerabilities were found in its validation code. Those funds were [10]even less recoverable.
[11]
The biggest, newest crater is crypto exchange FTX and the once-stellar reputation of its founder Sam Bankman-Fried after funds disappeared following what the firm is calling "unauthorized access" that resulted in the company's [12]bankruptcy .
[13]
Just how so much went so wrong so quickly is the question on many people's minds. On its bankruptcy forms, FTX [14]valued its assets at between $10 billion and $50 billion, and more than 130 affiliated companies. ®
Get our [15]Tech Resources
[1] https://www.gate.io/article/28671
[2] https://twitter.com/kris/status/1591036632664518657?s=20&t=1brWiQ-dqPKvjPay33e71w
[3] https://twitter.com/jconorgrogan/status/1591517130150772740?ref_src=twsrc%5Etfw
[4] https://twitter.com/kris/status/1591605600638881792?ref_src=twsrc%5Etfw
[5] https://www.theregister.com/2022/09/28/optus_data_breach_summary/
[6] https://www.theregister.com/2022/03/02/bitconnect_ceo_disappears/
[7] https://www.theregister.com/2022/08/02/flash_mob_robs_nomad_crypto/
[8] https://www.theregister.com/2022/11/11/on_call/
[9] https://www.theregister.com/2022/08/31/crypto_dotcom_australia_refund/
[10] https://www.theregister.com/2022/08/02/flash_mob_robs_nomad_crypto/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y3J0J5I59v6cy8nBUkugkwAAAEc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[12] https://twitter.com/SBF_FTX/status/1591089317300293636
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y3J0J5I59v6cy8nBUkugkwAAAEc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://www.twitter.com/FTX_Official/status/1591071832823959552
[15] https://whitepapers.theregister.com/
Re: 320k out, 285k in
That is quite a "fee" for returning the money.
Re: 320k out, 285k in
Assuming there wasn't already a large transfer queued up to be made to gate.ai and they basically returned all the coins they weren't actually expecting?
So how about the claim that gate.io's coin holdings were, by happy coincidence, audited while all those unexpected ones were resting in their account?
Re FTX
Question: "Just how so much went so wrong so quickly is the question on many people's minds."
Answer: "Crypto"
Re: Re FTX
Not really anything to do with Crypto and everything to do with the CEO using company funds as his own personal piggy bank.
Re: Re FTX
Exactly. Basically that and operating as a Ponzi scheme. Hopefully jail will soon follow.
It does seem The Register has been awfully quiet on the FTX story.
"It does seem The Register has been awfully quiet on the FTX story."
I don't blame them. There's going to be a lot of legal wrangling in the next few months and inaccurate reporting now would not be good.
Regarding the bouncing of funds around to whitewash audits: there are strong reasons to believe that this has been going on, and it's not restricted to one or two exchanges either.
Re: Re FTX
Exactly. As crypto matures it will come up against a bunch of issues that traditional banking has already solved by having strict protocols in place, flags on certain accounts and amounts, double and triple verifications etc. Of course they could have built those in if they had asked a banker in the first place instead of redesigning everything from scratch just to be disruptive.
Of course, retrieving mistakenly transferred money in traditional banks is easy because it's really solvable between the 2 parties involved. Rolling back a crypto transaction is nigh-on impossible given that everyone else on the network has to approve it, which I guess is why they went for a reverse transfer... though as another commenter mentioned above, unsure of the reason of unequal amounts. Maybe a cooperation fee if the recipient wasn't legally obliged to return them?
Re: Re FTX
I don't know if this really has anything to do with banking per se. As the director of my own company I am fully aware that I have to be responsible and accountable for the funds my company has and not treat them as my own.
It's more down to whether you are corrupt, incompetent, or just plain stupid.
Well ...
... what's a few hundred million amongst friends?
"The biggest, newest crater is crypto exchange FTX and the once-stellar reputation of its founder Sam Bankman-Fried after funds disappeared ..."
Funds didn't disappear. They were never there in the first place.
Whoops ..... there goes another few hundred million dollars !!!
"Funds didn't disappear. They were never there in the first place."
There is a very real problem with lack of funding to support all 'possible' results of trading crypto-currencies BUT ...
Funds DO disappear [many a time and oft :)] ... the question is the ease with which this happens !!!
After all the time crypto-currency has existed and and has been traded etc, it is still apparently easy to 'hack' and 'disappear' many many milliions of Dollars.
I do have some difficulty believing that this is just happenstance for some random hacker !!!
It happens far too regularly and at such 'convenient' times :) !!!
If 'caveat emptor' ever should be applied it is when 'playing' in the world of crypto-currency !!!
320k out, 285k in
Is no-one else wondering what happened to the 35,000 play coins that weren't returned?