CoinZest Exchange Accidentally Hands Out $5.3 Million in Crypto

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CoinZest has added to the recent spell of bad news for Korean exchanges when it was revealed that they accidentally airdropped millions of dollars’ worth of cryptocurrency to their users after a promotional campaign backfired. After realizing their mistake, CoinZest conducted a ‘rollback’ on their servers that undid the airdrop and returned the tokens to the exchange, but not before those who got wise had made hasty withdrawals. This mistake added to the news earlier this week that a CEO and an executive of another Korean exchange, Komid, had been given jail sentences for falsifying trading volume.

Airdrop Gone Wrong

CoinZest were involved in a promotion with gaming blockchain project Wager Games, where they intended to hand out hundreds of WGT tokens to their customers, but a “computer error” led to them mistakenly dishing out over $5 million worth of Bitcoin, Ethereum, and other cryptocurrencies instead. CoinZest’s servers were taken temporarily offline as developers raced to resolve the problem by restoring databases to their pre-error state. They also contacted customers who had withdrawn the airdropped tokens, asking them to return them, but this seems to have fallen on deaf ears, as it is reported that some $2.6 million worth is yet to be returned. Whether the customers have any legal right to return the money is as yet unknown and something that, presumably, CoinZest will investigate.

First Known Case

The CoinZest error is the first known case when an exchange has accidentally put crypto into user accounts. In February 2018 the Zaif exchange temporarily offered customers the opportunity to buy Bitcoin for free due to a computer glitch, although all transactions were cancelled upon discovery of the error. CoinZest’s case is different as up to half the funds may already have been moved on, which presents a huge logistical problem if they wish to reclaim any or all of those funds.
Of course, the right thing to do would have been to return the crypto to the exchange. But, those of us who have had our crypto wallets clogged up with valueless airdropped coins that we neither want nor asked for might just be raising a glass to those who withdrew before the servers were reset.