Blockfi, a cryptocurrency lending platform, wrongly distributed a set of payments to a group of customers, who found deposits of up to 700 BTC in their accounts. While most weren’t able to withdraw these funds, in the confusion, other customers that applied for withdrawals are now being threatened with legal actions against them.
Blockfi Messes up Promo Payments
Blockfi, one of the most popular cryptocurrency lending and borrowing platforms in the cryptocurrency sphere, mistakenly overpaid bonuses to a group of customers, with some receiving up to 700 BTC in their accounts. According to reports, these payments were related to a stablecoin promotion Blockfi is running, that would give additional benefits to customers to maintain a determinate balance of dollars in their Blockfi Interest Accounts. The bonuses also included income from enrolling partners into the platform.
Seems that Blockfi issued stablecoins sums of payments, but in bitcoin, sending some users BTC instead of GUSD, the currency the mentioned promotion advertised. The issue first blew up in social media, where customers of the company gloated about the payments, while others were concerned about the financial stability of the platform after issuing these oversized bonuses. It seems that a part of these funds was indeed withdrawn from the platform.
But this problem has also affected customers that did not have intentions of taking advantage of this whole situation. This is the case exposed by a customer in Reddit. The client has been accused of wrongdoing, and Blockfi is allegedly threatening to pursue legal actions against him. However, this issue seems to have affected the whole operative capacity of the platform, with customers complaining about a whole slew of different issues in the subreddit of the company.
The Company Answers
After all of this happened, Blockfi addressed the fact by issuing a statement via Twitter, in which the company acknowledged the problem. It informed that the vast majority of these funds were quickly identified and reversed immediately, but approximately 100 customers were able to withdraw these funds. However, Blockfi stressed that:
The company’s exposure is currently approximately $10M and decreasing quickly as clients are returning funds. We are incredibly grateful for our clients understanding the mistake and returning funds that did not belong to them.
While the company declared this mistake doesn’t imply any financial risks, having over 15 billion AUM, and that customers’ funds are safe, the confidence that many had in the company has eroded for some individuals. After this troublesome affair, some users have reported they are leaving the platform altogether as a result of this issue. The company further declared it will learn from its mistakes, having “implemented procedures to prevent issues like this from occurring in the future.”
What do you think about Blockfi’s erroneous promo payments mistake? Tell us in the comments section below.
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