BlockFi Mistakenly Deposits Outsized Bitcoin Payments

BlockFi, the crypto lending and trading business, mistakenly deposited large amounts of crypto to user accounts. The payments were associated with a promotion they were running, in which users would receive bonuses in USD stablecoins.

The promotion was intended to be “paid out in one lump sum in GUSD” according to their website. Instead, some accounts were paid the amount denominated in Bitcoin, with some receiving over 700 BTC (worth >$28,000,000 at current prices).

A screenshot from one affected user who withdrew the funds shows threat of possible legal action should they not be returned, and a pay-out of $500 should they return them by a set time.

BlockFi clearly has their hands full dealing with the mistakenly deposited bonus payments, and users have reported experiencing additional issues with the company’s services. The BlockFi subreddit is full of posts with individuals receiving the mistaken funds, having difficulty withdrawing, and being unable to trade. One user claims to have been falsely accused of withdrawing mistaken funds after withdrawing USDC which he or she had been deposited a month earlier.

A statement by BlockFi, noted that “fewer than 100 clients were incorrectly credited,” and “BlockFi has contacted these clients and is working with them to rectify the issue.”

There are risks with using centralized services like lending platforms and exchanges—these are especially well known by early Bitcoiner’s who have witnesses a great number of hacks, exit-scams, and insolvencies wipe out customer funds held by large custodians.

BlockFi claims that “client funds are not impacted and are safeguarded.” After raising a recent $350 million funding round, the company likely has large pools of capital to pull from should they be unable to recoup any of the mis-credited funds from users who withdrew to personal wallets.