Accidental $6.8m transfer lands Crypto.com user in prison

Jatinder Singh was sentenced to three years in prison after a two-year trial in which he was tried after Crypto.com accidentally sent him $6.5 million.

In a notable case involving one of the world’s leading cryptocurrency exchanges, an Australian man has been sentenced to three years in prison for embezzling funds wrongfully sent to him by Crypto.com.

In the incident, which took place in May 2021, Jatinder Singh, 39, received 10.5 million Australian dollars (about $6.8 million) instead of the $100 deposit he had planned to pay.

The error occurred when Singh attempted to deposit $100 into his Crypto.com account using a bank account managed by his partner, Thevamanogari Manivel. The deposit was initially rejected due to a discrepancy between the names on the exchange and the bank account.

A man who accidentally transferred more than $6 million into his bank account has been sentenced to three years in prison.

Jatinder Singh was informed that the $100 he deposited on the cryptocurrency website would be refunded, but it was mistakenly transferred… pic.twitter.com/zgJ1wDwYOI

— Wonderland (@wonderland2030) August 13, 2024

But a major accounting error by a local employee led to Singh receiving millions of dollars in back pay during the restitution process.

Believing the windfall to be a legitimate payment, Singh and Manivel immediately transferred the money into a joint account and went on a spending spree, buying two properties in Melbourne and purchasing luxury items. They also allegedly transferred A$4 million to an offshore account in Malaysia for safekeeping.

Crypto.com discovered the bug seven months later and initiated recovery procedures. Despite multiple attempts by the exchange and Commonwealth Bank to reach out to the pair, they initially dismissed the attempt as a scam. In March 2022, authorities arrested Manivel as he was about to board a flight to Malaysia. Singh was arrested shortly after.

Trial details

During the trial, Singh’s lawyer argued that his client had acknowledged that the money was not his and sought leniency, citing Singh’s lengthy pre-sentence detention, but prosecutors cited Singh’s actions – particularly his instructions to Manivel to transfer the money abroad – as evidence of criminal intent.

The presiding judge ultimately sentenced Singh to three years in prison, ruling that while Singh may not have had malicious intent, his actions did amount to theft, Manivel was sentenced to 18 months of community service.

Crypto.com vowed to continue its efforts to recover the money spent by Singh and Manivel, who have become cautionary tales in the ever-changing world of cryptocurrencies.