What are the chances that someone has accidentally transferred millions of dollars to your bank account? What if you were asked nicely by the person who sent it?
Users of the popular DeFI (Decentralized Finance) staking protocol Compound currently find themselves in this predicament. Some users have had arbitrary amounts of cryptocurrency deposited by the platform in recent days. The company updated contained a bug that allowed for the payment to be made. It now totals $89 million. Robert Leshner (founder and CEO of the platform) is asking for the money back.
On Thursday, Leshner used Twitter to appeal to users to return millions of dollars that were wrongly distributed. He even suggested that people who did so could receive 10% as a reward. Leshner threatened that if users didn't return the money, it would be reported to the IRS as income and most of you will be doxxed.
Compound is a cryptocurrency lending platform that allows both investors and borrowers the ability to trade assets without traditional banking services. These platforms are often viewed as risky due to the absence of regulatory safeguards that protect traditional banking services. This episode is a good example.
It was allegedly due to a mistake in an upgrade to Compounds smart contracts (such contracts facilitate crypto transactions). The alleged flaw led to users being flooded with too many COMPthe platforms native cryptocurrency token. For example, one person claims that they received approximately $20 million worth of COMP in one transaction.
This is not the first time that platforms like Compound have gone through this. BlockFi, a crypto lender, accidentally sent $20 million worth of Bitcoin to its customers in May. They then asked for it back. Alechemix, another crypto lender, experienced a similar problem not long afterward.
Leshner later backtracked on his threats to dox users who would not return funds, calling the idea boneheaded. Given the industry's ethos of security, privacy, anonymity and security, d oxxing has been widely considered a major betrayal within the crypto community.
CNBC spoke with financial experts that suggested that there is no legal requirement that the recipients of the payouts give it back.
It is interesting to note that a significant number of users appear to agree with the CEOs request for return funds. Leshner can be seen thanking different individuals on Twitter.
Yes, 0x2e4a. Good sir, I salute you. I would take $20 million from anyone who sent it to me. We reached out to Compound to get their comment and will update the story if they reply.