South Korean cryptocurrency exchange Coinnest found itself in the midst of a controversy as it accidentally distributed cryptocurrencies worth 6 Billion South Korean Won (worth approximately $5.3 Million USD) to the users on their platform. The exchange has now announced that it is going to take back the cryptocurrencies which were accidentally sent across to the users.
Last week, the exchange had accidentally sent across Bitcoins and other cryptocurrencies worth $5.3 Million. This, as per Coinnest, happened due to a computer error. They were trying to distribute the We Games Token (WGT), but accidentally ended up sending across Bitcoins and other cryptocurrencies due to a server issue.
Coinnest has since said that it intends to reverse these transactions and the users will not be compensated for any losses that they might have faced. The same server error led to the company having accidentally sent across South Korean Wons to some of their users. In addition to the reversal of this airdrop and taking back these tokens, Coinnest would also reclaim these Wons from the users.
An airdop is basically the term which is used to describe the incident of a cryptocurrency exchange sending cryptocurrencies to their users free of charge. This is usually a promotional tactic that some ICOs use. Sometimes even cryptocurrency exchanges, in order to promote the usage of their platform announce airdrops upon listing new currencies. One of the most popular such airdrops in recent memory was the Stellar airdrop where Blockchain Wallet distributed Stellar Lumens (XLM) cryptocurrencies worth $125 Million to their users.
This error took place last week and the server issues have now been resolved. The exchange claims that by the 19th of January, they had claimed back half of the airdropped currencies. The company had also sent out a notification to the customers saying that there has been an error on their part which has resulted in some users getting these cryptocurrencies which they should return. While the company continues to ramp up their reclamation drive, there is also a possibility that some users may have sold off the airdropped currencies that they accidentally received.
The Coinnest cryptocurrency exchange, in the past too, has been involved in controversies. Coinnest CEO Kim Ik-hwan was detained by the South Korean police who had alleged him to be embezzling funds. Raids were made upon the exchange by the prosecutors - but it remains unclear if any evidence was found proving these charges.
South Korea has been a country which has been rather open and accepting about the crypto economy. A number of cryptocurrency-related businesses thrive in the country and Bitcoin’s acceptance as well as popularity in the country are quite high. This accidental airdrop is an unfortunate incident and is likely to affect the flow of the working capital of the exchange if they fail to reclaim the funds.
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