Crypto company gives users $90 million by mistake, CEO begs for the money back

Users of the blockchain startup Compound received an unexpected gift on Wednesday night: millions of dollars worth of COMP tokens, which are used to reward crypto miners, were erroneously distributed.

The overall payout, which was made possible by a flaw in a corporate update, is now estimated to be around $90 million. As a result, the platform’s chief executive officer and founder, Robert Leshner, is pleading for the money to be returned and issuing a few threats.

Painful blunder

The snafu is a setback for bitcoin platforms trying to disrupt the financial system. Instead of depending on banks or other intermediaries to handle funds, decentralized finance platforms rely on so-called “smart contracts” between users that are entirely controlled by computer code.

Investors can trade directly with each other using a DeFi protocol like Compound. Cryptocurrency exchanges, on the other hand, are companies that allow the transfer of one type of asset for another, such as trading cryptos for fiat currencies.

One user couldn’t believe his luck, as he ended up with 70 million COMP tokens valued at about $20 million in his account. They tweeted, “What’s going on here?” Of course, Compound is now freaking out.

Begging for the return of the funds

On Thursday, Leshner took to Twitter to plead with users to return the millions that had been wrongfully given, even offering that anyone who returned the money might “keep 10%” as a reward for doing the right thing.

Leshner said if users refused to return the money, it would be “reported as income to the IRS, and most of you would be doxxed.”

The Compound faux pas is the most recent high-profile blunder. Last month, a well-followed cryptocurrency project went dark for many hours.

In August, a hacker used a flaw in another DeFi project to steal almost $600-million in tokens, which he later surrendered.

On hearing of the glitch, the price of Compound’s native token dropped roughly 14% in one day, however it has since bounced back.

 

Image courtesy of Cointelegraph News/YouTube

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