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- BlockFi is trying to reverse course after accidentally depositing bitcoin into users' accounts.
- The crypto-lending start-up said fewer than 100 clients were incorrectly credited with cryptocurrency associated with a "promotional payout that did not belong to them."
- A screenshot on Twitter appears to show one user received 700 bitcoin from BlockFi by accident.
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Cryptocurrency-lending start-up BlockFi is trying to reverse course after mistakenly sending some of its users bitcoin as part of a promotion.
The company made incorrect promo payouts to certain customers. The company said on Reddit on Tuesday that fewer than 100 clients were incorrectly credited with cryptocurrency associated with a "promotional payout that did not belong to them," and the situation will not affect BlockFi's ongoing operations.
According to Bloomberg, a number of recipients withdrew the coins before the company could backpedal. BlockFi CEO Zac Prince said the firm's exposure is around $10 million, but noted that's decreasing as more users return the coins.
"BlockFi carries loss reserves as part of its accounting policies and this is a fraction of existing loss reserves – so no negative impact to equity or ongoing platform operations," Prince told Bloomberg. "The issue that caused the withdrawals was fixed and incremental safeguards have been developed to prevent any similar issue in the future."
On Friday, the company tweeted: "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."
Several users commented in the Tweet replies that they received deposits of bitcoin. One screenshot showed a deposit of 700 bitcoin on Friday. Another Reddit user said he found 30 bitcoins in his account. He said he checked to see if he could withdraw but the withdrawals and trades didn't work.
Another Reddit user said they received an email from BlockFi accusing them of withdrawing funds and threatening legal action. The user said they were attempting to withdraw USDC which they had deposited a month earlier, unrelated to the promo payment.
BlockFi could not be immediately reached for comment.