Canadian Crypto Exchange Sues Users For Misappropriated Bitcoin

Coinberry, the Canadian crypto exchange, which is part of Wonderfi of Kevin O’Leary, has filed a lawsuit against 50 of its clients.

The suit was filed for getting back the bitcoin that the customers had received due to a glitch in the exchange’s software.

The lawsuit stated that Coinberry had gotten in touch with all 546 registered users who had been affected via email and it had demanded that these people return the misappropriated bitcoins.

The lawsuit

The crypto exchange decided to sue its clients who benefitted from the software glitch and had gotten the bitcoin without paying for it.

A regulated crypto trading platform, Coinberry is owned by Wonderfi Technologies Inc., which is based in Vancouver. The company is backed by the Shark Tank celebrity, Kevin O’Leary.

The lawsuit had been filed in June in Ontario and it explained that a software upgrade was made by the exchange in 2020.

While doing so, it had accidentally allowed its users to purchase bitcoin with Canadian dollars, but the payments were not properly transferred to the exchange’s accounts.

The glitch

The crypto exchange said that when the software glitch had occurred, customers were able to initiate an Interac e-transfer.

This allowed them to get the money credited to their accounts on the Coinberry exchange and they were able to use it to buy bitcoin.

They then transferred the coins and canceled the original e-transfer that they had initiated. In this way, they were able to keep the bitcoins and did not pay a dime for them.

Coinberry disclosed that about 120 bitcoins had been acquired by around 546 customers of the exchange without paying for them before they managed to fix the software issue.

It had gotten in touch with all of these clients via email and asked them to return the misappropriated bitcoins.

The bitcoins

The exchange disclosed that 270 of the users had responded to its request and it was able to get back 37 bitcoins that were misappropriated.

The Canadian exchange noted in the lawsuit that some of the clients had transferred the ill-gotten gains on crypto exchange Binance.

It added that they had immediately gotten in touch with Binance and the world’s largest crypto exchange and identified the amount of misappropriated bitcoins.

Binance had also restricted access to the accounts that contained the misappropriated bitcoins. But, two-thirds of the misappropriated bitcoins have not been recovered as yet.

The lawsuit was filed against 50 customers for the recovery of 63 bitcoins, which include 9.48 BTC that had been transferred to Binance.

Coinberry also disclosed that the misappropriated bitcoins mentioned in the lawsuit do not include those who had taken amounts under $5,000 and had not returned as yet.

It was also noted that the biggest misappropriated amount that had not been returned was around $385.722.31.

This was done via two accounts under the names of Connor Heffernan and Jordan Steifuk, but the Canadian crypto exchange said that they belonged to the same individual.