Legal Process Continues Following Crypto.com Transfer Mishap
Jatinder Singh, a customer of Singapore-headquartered Crypto.com is expected to face a plea trial next month in the wake of an errant transfer that occurred on the platform over two years ago.
In 2021, Crypto.com inadvertently transferred over $10 million into Thevamanogari Manivel’s Commonwealth Bank account in Australia. Remarkably, this substantial error went unnoticed by Crypto.com for seven months until it was uncovered during an audit.
18-month sentence
Manivel, a 41-year-old disability support worker, was arrested at Melbourne airport while attempting to board a plane to Malaysia in March 2022. She was holding a one-way ticket and nearly $11,000 in cash. Her recent sentencing, following her guilty plea for recklessly dealing with the proceeds of the crime, has garnered significant attention.
The court imposed an 18-month community corrections order, including six months of intensive compliance and unpaid community work. This punishment was in addition to the 209 days Manivel had already spent in custody.
Embarrassing error
Crypto.com’s multimillion-dollar mistake made headlines globally when it came to light during legal proceedings aimed at freezing Manivel’s assets. This incident occurred during a period of heightened uncertainty in the cryptocurrency market, mere months before the highly publicized collapse of rival FTX.
In 2018, Manivel met Jatinder Singh, who became her partner and shared her interest in cryptocurrency investments. Singh attempted to make a payment using Manivel’s bank account on Crypto.com but encountered a rejection due to a name mismatch. A processing error, however, led to a massive transfer of $10.47 million into Manivel’s account.
Realizing the overpayment, Singh advised Manivel to move the funds to a joint Westpac account. Between the transfer and Manivel’s arrest, the money was used to purchase four houses, vehicles, art, and furniture, and $4 million was sent to an overseas account.
Crypto.com discovered the error during an audit in December 2021 and initiated efforts to reclaim the funds from Commonwealth Bank. In January 2022, the bank contacted Manivel multiple times, seeking the return of the money. Manivel, initially regarding these communications as scam attempts, remained unaware of the gravity of the situation. She later informed the police that Singh had claimed to win the money in a Crypto.com competition.
Theft charges
With Manivel having been dealt with by the courts, attention now turns to Singh, who faces charges of theft and is scheduled for a plea hearing on October 23.
In response to this incident, Crypto.com highlighted its commitment to enhancing internal processes to ensure security and compliance in financial services. This includes updates to their refund and withdrawal systems to prevent such occurrences in the future.
The wayward transfer may have left Crypto.com with egg on its face, but the firm has been redeeming itself via other endeavors, including the roll-out of the use of AI on its platform. On the regulatory front, the company has been working diligently towards compliance in the Spanish market, having already acquired trading licenses in Dubai and its home market of Singapore.
This case serves as a cautionary tale of the unexpected consequences that can arise in crypto. Such elementary mistakes will not provide confidence to service users. The saga lays down a marker for a need for greater professionalism in the sector.
