Key Takeaways
- The user reportedly transferred the money to an external bank account beyond the reach of Crypto.com’s authority,
- Crypto.com’s lawsuit demands to hold McJunkins accountable for the outstanding amount.
In a court filing on July 6, leading cryptocurrency exchange Crypto.com found itself embroiled in a legal dispute after mistakenly depositing $50,000 into a user called James Deutero McJunkins’ account in June 2022.
Despite the user not acquiring the funds through trades or any other activity, McJunkins swiftly transferred the money to an external bank account beyond the reach of Crypto.com’s authority, disregarding repeated requests to return the funds.
Seeking resolution, Crypto.com turned to arbitration in October 2022 to address the missing funds, accusing McJunkins of civil theft and breach of contract regarding his account. The arbitrator ruled in favor of the company in April 2023, awarding Crypto.com $76,391.46. The amount included the original $50,000 transaction, $1,786.11 in statutory interest, $21,205.35 in attorneys’ fees, and $3,400 in arbitration costs.
However, despite the favorable arbitration ruling, the arbitrator lacked the authority to compel McJunkins to repay the exchange, leaving Crypto.com with no choice but to pursue legal action in federal court for enforcement. The company filed a petition on July 6, requesting the Florida court to confirm the arbitrator’s award, enter a final judgment in Crypto.com’s favor, and hold McJunkins accountable for the outstanding amount.
This legal battle is not the first setback Crypto.com has faced in recent times. In November of the previous year, the exchange admitted to mistakenly sending over $400 million in Ethereum digital coins to another cryptocurrency exchange called Gate.io. Furthermore, in August 2022, Crypto.com mistakenly issued a customer $7.2 million instead of a $68 refund.
The latest legal battle also comes amid reports that the Singapore-based group operates proprietary trading and market making teams, according to five people with direct knowledge of the matter.
