Queensland crypto exchange Swyftx was punished for a blunder that saw three customers withdrawing over half a million dollars falsely deposited into their accounts.
Swyftx gets punished for its mistake
Sometimes crypto exchanges get the wrong end of the stick, but you can say a better opponent bested them. That would be true for the Mt. Gox debacle or the Bitmarket hack, where a hacker absconded with $275 million AUD thanks to stolen private keys. But some mistakes are just lazy and unprofessional, and Swyftx’s mistaken $2.3 million AUD deposit is one of them.
The story goes that due to a “system error on the Swyftx platform,” three customers called Thi Thu Mai Nguyen, Thuan Dinh and Van Trong Le, all registered at a Perth suburb, mistakenly received that amount of money in Bitcoin. Within three days, the three gentlemen managed to withdraw $521,550 AUD worth of it:
- Dinh withdrew 2.23230 of 19.13074 deposited bitcoin.
- Nguyen withdrew 3.18819 of 5.29579 deposited bitcoin.
- Le withdrew 0.56427 of 1.36196 deposited bitcoin.
It is unknown why exactly the men did not withdraw the full sums.
Swyftx proceeded to sue the three gentlemen in the District Court in Brisbane, alleging the trio must pay restitution for their unjust enrichment by withdrawing the mistakenly deposited Bitcoin. On top of that, Swyftx claimed damages for breaching its terms of use.
However, the lawsuit was dropped only a week later, and Swyftx admitted to an isolated administrative error. The exchange announced that it had taken “robust measures” to ensure this does not happen again, however it’s clear that users have definitely lost trust in this small exchange
Not all customers get as lucky
While that is certainly an amusing anecdote with a fortunate outcome for the three men that received the mistakenly deposited bitcoin, it usually happens the other way round.
For the most part, hackers have targeted crypto exchanges time and again, sometimes with success. These are not only limited to smaller exchanges either. For instance, Coinbase saw data from 6,000 accounts stolen last year, although no holdings were compromised. Even though bigger exchanges like CoinSpot, BTC Markets, and Independent Reserve take robust measures to protect their customers, it still comes down to the individual to ensure a maximum level of security.
Even basic security measures like two-factor authentication and choosing a strong and unique password for your exchange account go a long way when it comes to protecting your crypto holdings. Unfortunately, many individuals take a lacklustre approach to protecting their crypto deposits and rely solely on security provided by the exchange.
That is doubly true for interacting with DeFi applications, where hacks are commonplace. Storing private keys at a safe place and interacting only with tested smart contracts and applications are basic measures of security that every crypto investor should follow. At the end of the day, for every lucky investor that gets a few Bitcoin mistakenly deposited into their account, there are thousands of victims that see their accounts drained due to insufficient security measures.
