BlockFi CEO Confirms Sending Hundreds of BTC to Users’ in a Bungled Promotion Giveaway

And now the firm is reversing the transaction and asking for their funds back which are already withdrawn by some users and is threatening legal action.

BlockFi’s latest promotion campaign has turned out to be very costly for the crypto lender.

As part of the company’s March promotional giveaway, BlockFi reportedly ended up sending massive amounts of Bitcoin to its users’ accounts instead of stablecoins.

One such user was rewarded a whopping 701 BTC, which would make it worth over $28 million at $40k per BTC.

Now, the firm is reversing all the transactions that it has made and asking for its funds back, which some users have withdrawn, and BlockFi is threatening legal action. BlockFi tweeted on Saturday,

“Some clients who participated in the March trading promotion may see an inaccurate bonus payment displayed in their transaction history. Our team is working on a fix, and the proper amounts will be reflected shortly.”

Block CEO Zac prince confirmed that they “sent a couple hundred BTC to <100 clients before it was caught.” He added,

“The amount at risk is a fraction of the BTC we own with equity capital and a fraction of loss reserves we carry for this exact purpose.”

Some speculate that this could have played some part in Bitcoin’s sell-off as David Puell did some thinking aloud with “I wonder how much supply was introduced into the market because of this “error.”’

Better Give Them Back

Users have taken to Reddit to share what’s really happening, with one such user sharing the email they received from BlockFi, which is asking for its funds back. The email reads,

“Following up on yesterday's email, our records indicate that your account is still in an overdraft status based on your incorrect withdrawal of a crypto amount that you did not deposit or earn with Blockfl on May 17th.”

The firm then goes on to request the funds that have been withdrawn by the user to be returned immediately. The email further states,

“As stated in the Interest Account Terms, “Fraudulent activity, including any attempt to withdraw funds that you do not own, did not transfer into your Crypto Interest Account or did not purchase, is strictly prohibited….”

BlockFi is conveying legal action against those who have withdrawn their funds and haven't returned them yet. It added,

“Failure to return the erroneously received assets by 5:00 PM EDT today (May 18th, 2021) may constitute a crime and will result in BlockFi taking legal action. If you initiate the return by that time, we will apply $500 worth of GUSD to your account for any trouble this has caused.”

However, the company CEO is not really concerned as “it is just a fraction of loss reserves and the platform is operating normally.”

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