Cryptocurrency company Blockfi accidentally sends users millions in bitcoin – and now it wants it back

·2-min read
A man talks on a mobile phone in a shop displaying a bitcoin sign during the opening ceremony of the first bitcoin retail shop in Hong Kong (AFP/Getty)
A man talks on a mobile phone in a shop displaying a bitcoin sign during the opening ceremony of the first bitcoin retail shop in Hong Kong (AFP/Getty)

Cryptocurrency lender start-up BlockFi accidentally sent users huge amount of bitcoin as part of a promotion – and is now asking for it back.

The company sent payouts in bitcoin instead of US dollars to customers, and although it is working to reclaim the funds a number of users had already withdrawn the coins, Bloomberg reports. Each coin is currently trading at £29,671 following a market crash.

One user apparently received 700 bitcoin – worth £21m – rather than $700. Blockfi told Bloomberg that it affected fewer than 100 customers.

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“BlockFi carries loss reserves as part of its accounting policies and this is a fraction of existing loss reserves – so no negative impact to equity or ongoing platform operations,” Zac Prince, co-founder and chief executive officer of BlockFi, told the news site.

“The issue that caused the withdrawals was fixed and incremental safeguards have been developed to prevent any similar issue in the future.”

>> Two experts unpick chaotic week for bitcoin, ethereum and other cryptocurrencies in live stream

The company also tweeted: “Some clients who participated in the March trading promotion may see an inaccurate bonus payment displayed in their transaction history. Our team is working on a fix and the proper amounts will be reflected shortly.”

Bitcoin has recently been under criticism after regulation from Chinese state-backed organisations, including the China Banking Association, said that digital currencies are not “real”, and that they “should not and cannot be used as currency in the market”.

As a result bitcoin saw its price fall by 25 per cent – approximately $10,000. Dogecoin dropped 30 per cent, and cardano fell more than 25 per cent.

Despite the crash, Nobel prize-winning economist Paul Krugman said in a series of tweets that he has given up on predicting the demise of bitcoin, calling it a “cult that can survive indefinitely”.

The crash was somewhat stemmed by Tesla CEO Elon Musk, who tweeted that Tesla has “diamond hands” and was refusing to sell its holdings in spite of the uncertain market.

Mr Musk had recently announced that his electric car company would not be accepting payment in cryptocurrency, causing a smaller crash in the market.

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