A recent incident involving Kow Seng Chai, an Australian businessman, has sparked legal controversy and highlighted the potential pitfalls of cryptocurrency transactions.
Mr. Chai became embroiled in a complex situation after receiving about $500,000 in crypto by mistake from Rhino Trading Pty Ltd, the operator of the OTCPro trading platform.
The error stemmed from a clerical mistake during a routine transaction. Rhino Trading intended to deposit $99,500 into Mr. Chai’s account, but an extra zero was inadvertently added, inflating the sum to a significantly larger amount. Despite attempts to contact Mr. Chai and rectify the mistake, he reportedly vanished, prompting Rhino Trading to take legal action.
A Pattern of Mishaps
Although most stories about mistakes in the crypto world involve people who lost their funds to the loss of drives or passwords, this case of mistaken transfers is not isolated.
In 2022, Crypto.com, a prominent cryptocurrency exchange, mistakenly transferred a staggering $10.5 million to an Australian woman, Thevamanogari Manivel. This error, similar to the one involving Mr. Chai, stemmed from a clerical mistake.
Ms. Manivel and her partner, Jatinder Singh, believed the unexpected windfall to be a legitimate contest prize and proceeded to spend a significant portion of the funds on various purchases, including real estate and luxury goods.
The ensuing legal proceedings surrounding this incident further illustrate the complexities associated with such accidental transfers and the challenges of determining intent in such situations.
Mr. Singh pleaded guilty to charges of stealing $6.09 million from the mistakenly transferred funds. However, a judge expressed reservations regarding the sincerity of his remorse and raised concerns about conflicting statements made by Mr. Singh.
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Mr. Chai and the $500,000
As for Mr. Chai’s case, it took the company 9 days to realize its mistake. The company sought to freeze Mr. Chai’s assets and prevent him from leaving Australia while pursuing the return of the misplaced funds.
Mr. Chai withdrew $956,000. However, he had over $460,000 in his wallet when the funds were sent to him. OTCPro lost almost $500,000 and has been unable to reach Mr. Chai. The Victorian Supreme Court issued an order to freeze Mr. Chai’s assets on February 9. The court also issued an injunction to prevent him from leaving Australia on February 21 after he did not show up.
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