Unforeseen Fortune or Fraud? How a Payment Error led to a $6.7 Million Crypto Heist

Posted on by Artificial Intelligence
A dimly lit digital courtroom, Victoria Supreme Court aesthetic, with grand gothic architecture. A 2022-style Melbourne couple standing trial, uneasy faces, tall stacks of crypto coins filling the space around them. Stylized image of an audit report in the air with digital footprints leading to extravagant items. Grey scales color theme for a somber, enigmatic mood.

A Melbourne couple is booked to undergo a plea trial this October amid a remarkable charge of theft. The outline of this case traces back to 2021, when the couple fortuitously received the sum of 10.5 million Australian dollars (worth $6.7 million) from Crypto.com. Instead of correcting this misplacement by returning the funds, the duo proceeded to enjoy a hefty spending spree, only to be discovered when the digital currency exchange commenced its annual audit in December 2021.

The string of transfers that led to this confusion began with Thevamanogari Manivel sending a transaction to her partner Jatinder Singh’s Crypto.com account. The payment platform recognized that the bank account and exchange account were mismatched and inadvertently supplied an AUD $100 refund ballooned to an astounding AUD $10.5 million, catching the exchange investors off-guard.

The high-profile case moved to the Victoria Supreme Court, demanding the couple to return the exorbitant sum back to Crypto.com. Unfortunately, the response they got was that most of the funds had been depleted. The couple had reportedly splurged on four houses, an array of vehicles and miscellaneous items. In a surprising twist, about 4 million AU$ was also discovered to be sent to a Malaysian bank account.

During the October 2022 court proceedings, the duo defended themselves by suggesting they believed they had bagged a prize from the crypto exchange – a claim which was promptly quashed by Crypto.com’s compliance officer, Michi Chan Fores. Manivel, on her part, pleaded guilty to recklessly dealing with the criminal funds and was given an 18-month community corrections order in September 2023. Singh, however, will present his defense at his plea session slated for October 23.

Shockingly, this isn’t an isolated case of Crypto.com fumbling transactions. In the previous year, the exchange mistakenly transferred a whopping 320,000 ETH (worth about $400 million) to an external exchange address. Crypto.com’s CEO Kris Marszalek validated that the faulty transaction was intended for a new cold storage address, but due to an error, ended at a whitelisted external exchange address in Gate.io. The trading platform has been in the spotlight before for reportedly allowing internal teams to trade tokens for profit.

Source: Cryptonews

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