Crypto.com Cuts 20% Jobs Amid ‘Unforeseeable’ Industry Events
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Crypto.com just admitted to making another very large and concerning clerical error: it mistakenly sent 320,000 in Ethereum (~$416 million USD) to another cryptocurrency exchange, called Gate.io, about three weeks ago (via Web3 Is Going Just Great). In a post on Twitter, Crypto.com CEO Kris Marszalek says the company was supposed to send the crypto to one of its cold, or offline, wallets, but accidentally sent it to a “whitelisted” address belonging to its corporate account at Gate.io.
This all unfolded after Marszalek publicly posted the company’s cold wallet addresses to provide transparency about what the exchange does with its funds. After digging into Crypto.com’s transactions, one user, Conor Grogan, points out that the exchange…
Let’s say you were Thevamanogari Manivel, a woman in Melbourne, Australia with an interest in crypto, and you allegedly used Crypto.com to request a refund of 100 Australian dollars, but instead received $10.5 million (about $7.2 million in U.S. dollars) by mistake. Would you immediately transfer the funds back? Or would you — again, allegedly — go on a buying spree, including the purchase of a five-bedroom home for your sister?
Don’t answer yet!
First, listen to a few words of advice from Hollywood actor Matt Damon, spoken on behalf of the very company you just received a massive payday from:
“Fortune favors the brave,” indeed.
Life-changing windfalls caused by glitches happen so often in the crypto world, it sort of seems like they’re now part of the thought process that leads people to invest in decentralized finance in the first place.
For instance, in 2017, a crypto wallet service called Parity accidentally gave a single user control of all of the wallets of a certain type, meaning that user was suddenly able to seize about $300 million in the cryptocurrency ether. That user, who wasn’t actually trying to perform some sort of heist in the first place, attempted to reverse what they had done in a panic, but, instead, accidentally stranded the funds permanently — in effect destroying $300 million.
And last year, the crypto firm Compound accidentally deposited seemingly random amounts of cryptocurrency in multiple accounts, which, all told, ended up totaling about $90 million. In the immediate aftermath of the initial reports, Compound CEO Robert Leshner tried to claw back all that money by asking nicely and then threatened to report the users to the IRS.
This is just a small sample of what happens when people win the “Accidental Crypto Millionaire Sweepstakes.” And notably, these are all cases that became publicly known.
In any case, it appears Manivel did exchange all that crypto she received in May of 2021 for regular Australian money, and did spend a great deal of it on things like real estate. Then Crypto.com — which is known as “Foris GFS” to Australian users — took legal action against Manivel this past February after discovering its mistake during an audit in December of last year. Her bank accounts were frozen and she was forced to sell the house she gave her sister, and give the proceeds to Crypto.com plus interest. All this is according to The Guardian.
But hey, if you listen to Matt Damon, you don’t want to be one of those losers who don’t take that big step into the unknown. Better to be one of “the ones who embrace the moment and commit.” Isn’t that right, Crypto.com?
When Australian woman Thevamanogari Manivel put in a Crypto.com refund request last year, she got far more than she bargained for. Manivel asked for a refund of $100 AUD (now worth around $68 USD). Instead, seemingly due to an employee entering her account number into a payment section of a refund form by mistake, the company dropped $10.5 million AUD ($7.2 million at current exchange rates) into her account instead.
According to a report from 7News (by way of The Verge) Crypto.com made the overly generous refund in May last year. However, it apparently did not identify the mistake until it carried out an audit in December, seven entire Gregorian calendar months later.
Manivel kept the money and reportedly transferred it to a bank account. A court granted Crypto.com a freeze on the account in February. The Guardian reports that most of the cash had been moved to other accounts by then, but those accounts were later frozen too. That same month, Manivel is said to have spent $1.35 million AUD (approximately $890,000) on a five-bedroom home and transferred ownership of it to her sister. A court has ordered the sale of the property as soon as possible and for the funds to be returned to Crypto.com with interest. The case will return to court in October.
Perhaps not too long ago, Crypto.com might have been more willing to write off the refund as a deeply unfortunate mistake. But the cryptocurrency market has been tanking this year and the company lost $34 million in a January hack. It also laid off hundreds of employees this summer due to the crypto downturn.
So, it’s perhaps not too surprising that Crypto.com is trying to get the money back from Manivel. After all, it has a long-term arena sponsorship deal in Los Angeles, for which it’s said to be paying $700 million over 20 years, and a Matt Damon to keep fed.
The bear market is not stopping Crypto.com from expanding the adoption of its crypto services around the world.
“This is an exciting next step for Crypto.com in an important market,” said co-founder and CEO Kris Marszalek.