- July 8, 2023
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
Crypto.com, a cryptocurrency exchange based in Singapore, won an arbitration against a client who received a mistaken deposit of $50,000 but refused to return it, recent court filings reveal.
Crypto.com Wins?
It is reported that the defendant, James Deutero McJunkins Jr. from Georgia, the United States, transferred the funds to an external bank account after receiving the deposit on June 24, 2022.
Despite multiple attempts by the exchange to retrieve the funds, McJunkins refused to comply, forcing Crypto.com to initiate an arbitration case to recover funds.
In April 2023, Crypto.com won a case against McJunkins in arbitration, and the defendant will have to not only refund the initial $50,000 but also pay over $26,000 in legal fees. However, McJunkins has yet to follow the ruling, so a judge has been assigned to enforce it as initially directed.
Still, observers blame the cryptocurrency exchange, saying they are responsible for ensuring funds are sent to the correct accounts or addresses. While there is a moral aspect as to why the recipient failed to refund funds, supporters claim it is not a moral obligation for him to reimburse.
Their position seems valid because, by law, arbitrators cannot compel individuals to pay the winning party, and further legal action may be necessary to enforce the decision. Therefore, the exchange has taken the matter before a United States Southern District Court of Florida to “enter a final judgment in its favor.”
The $6.6 Million Error
Crypto.com has been in error before. In May 2022, Crypto.com mistakenly refunded a client $6.6 million instead of $66 when she requested.
The exchange only realized the mistake seven months later during an end-of-year audit. By then, the client had already used the money to purchase a multi-million dollar property in Melbourne’s Craigieburn suburb. The exchange took legal action to recover the funds owed, and the judge allowed them to sell the prime property.
Crypto.com is one of the largest cryptocurrency exchanges by liquidity and client count. Their errors, nonetheless, highlight the space’s nascency and how mistakes can be costly. In the two events where the exchange wrongly sent over $6.65 million to the wrong account, they were spared permanent loss.
In the current case, the defendant received funds in fiat, which can be reversed. In any other event, should funds have been deposited in cryptocurrencies, Crypto.com might have had a hard time considering the irreversible nature of crypto transactions and possibly backlash from the community.
In late June, Crypto.com received a Virtual Asset Service Provider (VASP) license from the Bank of Spain and can roll out services in the country. Like most European Union (EU) countries, Spain will comply with Markets in Crypto-Assets (MiCA), approved by the EU parliament in April and set to become law in 2024.
