Crypto.com Faces Scrutiny Over Multi-Million Dollar Refund Error

• Crypto.com mistakenly refunded $6.8M instead of $65, causing a major legal issue.
• Jatinder Singh and Thevamanogari Manivel spent funds on property and gifts before being caught.
• Singh pled guilty to theft, while Manivel received a prison sentence and community corrections order.

A recent report from NewsWire highlighted the consequences of a significant mistake by Crypto.com. The exchange accidentally refunded $6.8 million to Jatinder Singh instead of the $65 he initially deposited. This mistake, compounded by years of lavish spending, has now resulted in legal action against Singh and his partner, Thevamanogari Manivel.

In May 2021, Singh attempted to deposit $65 into his Crypto.com account through his partner’s bank account. Due to a name mismatch, the deposit was rejected. However, a Crypto.com employee mistakenly issued a refund of $4.42 million to Singh’s partner’s account instead. This error went unnoticed for seven months until an internal audit discovered the discrepancy.

During the period before the mistake was identified, Singh and Manivel spent a significant portion of the funds. They purchased two homes and two plots of land in Melbourne, Australia, and gifted $650,000 to a friend. Their spending spree included investments that were later scrutinized in court.

The financial windfall led to serious legal consequences. Singh pleaded guilty to the theft of $4.42 million at the Victorian County Court. His defense argued that he did not fully grasp the gravity of his actions. He is scheduled to be sentenced later this month.

Manivel’s case was equally serious. After the error was discovered, Crypto.com contacted Commonwealth Bank, which notified Manivel of the need to return the funds. Despite her initial suspicion that it might be a scam, she transferred $2.6 million to her account. Manivel was arrested in March 2022 while attempting to board a flight to Malaysia.

Manivel was sentenced to 209 days in prison. Given her time on remand, the court considered her sentence served. She also received an 18-month community corrections order after pleading guilty to recklessly handling the proceeds of a crime.

This incident is not isolated. Crypto.com has faced previous issues with sending incorrect refunds, including a case in August 2022 where a woman received $10.5 million instead of $100. Such errors raise questions about the operational checks and balances in place at cryptocurrency exchanges.