Australian prosecutors are pushing for a prison sentence for a Crypto.com user who mistakenly received nearly $7 million USD due to an internal error. The individual spent much of the money before the exchange identified the mistake, raising questions about the legal consequences of spending erroneously received funds.
The Accidental Transfer
In May 2021, Crypto.com mistakenly sent $6.86 million (10.47 million AUD) to Thevamanogari Manivel and Jatinder Singh, an Australian couple, instead of issuing a $100 refund. The error occurred when an employee accidentally entered an account number into the payment section of an Excel spreadsheet. The discrepancy was only discovered during an internal audit in December 2021, seven months later. By then, Singh had already used the funds to purchase multiple properties and even gifted a friend $1 million AUD, believing he had won an “online raffle.”
Legal Arguments and Court Proceedings
During a court hearing on August 2, 2024, Australian prosecutor Campbell Thomson argued for a prison sentence for Singh, citing the substantial amount of money involved. He stated that the incident was “out of range” to be considered a mere crime of opportunity. Although the duration of the potential sentence remains uncertain, Thomson emphasized the necessity of some form of imprisonment.
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Conversely, Singh’s lawyer, Martin Kozlowski, argued that his client did not fully understand the gravity of the situation, suggesting that anyone in a similar position might have acted similarly. Kozlowski also highlighted that the funds came from a multinational corporation that didn’t realize the error until much later.
Previous Concerns and Future Sentencing
Prosecutors had previously expressed concerns that Singh might flee the country, given that only $4.9 million of the original sum had been recovered, with some funds reportedly sent abroad. Singh is scheduled to receive his sentence next month. Meanwhile, his partner, Manivel, received a roughly seven-month prison sentence (time already served) and an 18-month community corrections order after pleading guilty to recklessly handling the proceeds of crime.
This case comes amid a broader increase in cryptocurrency-related crimes in Australia. The Australian Transaction Reports and Analysis Centre (AUSTRAC) recently noted a rise in criminal activity involving cryptocurrencies, attributing it to the anonymity and speed of transactions that digital currencies offer.
