A Malaysian man has been ordered to return ₿11.3 mistakenly sent to him by an exchange back in 2017. Robert Ong received the sum in error but, instead of sending it back, used it for futures trading on Bitfinex, and swiftly lost it. The exchange, Luno, subsequently sued him, and last week won the case, according to Bitcoin Malaysia.
Ong Goes Long and Loses
In October 30, 2017, when the crypto bull market was in full swing, Robert Ong bought ₿11.3 from Luno, which he then sent to Bitfinex. However, due to a technical glitch at Luno’s end, Ong was credited with double the BTC, leading to ₿22.6 ending up in his Bitfinex account.
Luno informed Ong of the error on November 2 and also that, due to the mechanics of blockchain technology, they couldn’t simply reverse the payment. Instead, Ong was required to send it back. Court documents state that Ong acknowledged this at the time, but had already put the ₿22.6 into futures of Chain Split Token (CST), an ultimately doomed hard fork token that Bitfinex tried to launch but pulled, resulting in Ong losing everything.
By the time that Ong realized that CST was dead the BTC price had gone up, meaning that it would cost him much more physical cash to return the ₿11.3 to Luno. He offered to pay the original cash purchase value back to Luno, but they rejected this and instead sued for the full ₿11.3.
Bitcoin is Not a “Thing”
Ong’s argument centered around three points:
- Bitcoin is not a “thing” but is instead intangible and incapable of being returned, which under Malaysian law he would have been required to do.
- Trading cryptocurrencies is illegal in Malaysia, meaning Luno is an therefore an illegal entity which disallows them from pursuing ‘legal remedy’.
- Luno never actually owned the BTC because it came from the miners straight into Ong’s wallet, so they should not have it returned to them
However, the court didn’t agree with Ong’s arguments, stating that:
- Cryptocurrency can be categorized as “anything” which, despite not being money in a legal sense, still has monetary value and is still a thing to be returned if sent in error and not paid for.
- Cryptocurrency trading is not illegal – in fact the Bank of Malaysia has issued guidelines to crypto exchanges on how to operate within the law.
- The relationship between Ong and Luno was akin to a banking relationship, meaning that accidental transfers must be returned in full.
Ong has therefore been ordered to return the ₿11.3, and doesn’t even have the benefit of buying it back at a cheaper price – on November 2, 2017, when he was first made aware of the error, BTC was $6,700, meaning Ong will be out of pocket by some $14,700 – if he can even afford it.
If this isn’t a lesson on betting on shitcoin futures then it’s hard to imagine what is. But then, 2017 was a very different time…