Crypto user pleads guilty after spending $10m deposit error

A crypto investor who received more than $10 million instead of a $100 deposit is facing jail time after Crypto.com discovered the error.

In May 2021, Crypto.com user Jatinder Singh attempted to deposit $100 into his exchange account using a bank account managed by his partner Thevamanogari Manivel. The transaction was bounced due to conflicting names on the deposit form. However, a mistake by a local employee resulted in Singh receiving $10.4 million during the refund process.

Singh and Manivel withdrew some of the money, believing it was a crypto lottery payout, and spent millions buying two properties in Melbourne and buying gifts.

Crypto.com discovered the bug seven months later and initiated recovery procedures with the Commonwealth Bank. Manivel claimed he thought it was a scam and transferred $4 million to an offshore account for safekeeping. He discovered the bug seven months later and initiated recovery procedures with the Commonwealth Bank.

Authorities arrested him in March 2022 as he was about to board a plane to Malaysia, where the money was destined.

Singh’s lawyer, Martin Kozlowski, said his client accepted the money was not his and asked the court to take into account Singh’s months of detention in sentencing. Australian prosecutor Campbell Thomson argued that Singh’s instructions to Manivel showed criminal intent.

The presiding judge disagreed and said Singh was not a malicious actor. Singh’s sentencing was scheduled for later this month. Manivel will impose an 18-month community corrections order. Crypto.com said it would seek to recover the funds the pair spent in Australia.

Crypto.com has made this mistake at least twice before. In 2022, a user received $10.5 million instead of $100 before spending some of the money with his sister. The crypto exchange sued both of them and took them to trial in a Melbourne court shortly after.

Additionally, in 2022, crypto.com sent $400 million to the wrong Ethereum (ETH) wallet address. It is unclear how the platform resolved the issue.