Australian prosecutors are advocating for a prison sentence for a Crypto.com user who inadvertently received nearly $7 million due to an internal error and spent most of it before the mistake was discovered. The case highlights significant legal and ethical questions surrounding the mishandling of large sums of money in the crypto world.
The Mistaken Millions: What Happened?
In May 2021, Crypto.com made a monumental blunder that sent 10.47 million Australian dollars (about $6.86 million) to Australian couple Thevamanogari Manivel and Jatinder Singh. The error occurred when an employee mistakenly entered an account number into the payment section of an Excel spreadsheet, intending to process a modest 100 AU$ refund.
The exchange only discovered the mistake during a December 2021 internal audit—seven months after the funds had been transferred. By then, Singh had already splurged on multiple properties and even gifted 1 million AU$ to a friend. Singh reportedly believed he had won a “raffle” or some form of online contest, which might explain his initial reaction to the windfall.
Prosecutor’s Argument: Time to Pay the Price
At a court hearing on August 2, Australian prosecutor Campbell Thomson argued that the size of the error rendered it a serious crime, rather than a mere crime of opportunity. Thomson insisted that a prison sentence was warranted given the significant amount of money involved. However, he also suggested that the sentence could be adjusted based on Singh’s time served in pre-sentencing detention.
“It may not be that you send him to jail for very long at all after taking into account his presentence detention,” Thomson noted.
Defense Perspective: The Complexity of the Situation
Singh’s lawyer, Martin Kozlowski, contended that Singh did not fully comprehend the gravity of the situation. Kozlowski emphasized that anyone could have struggled to grasp the seriousness of receiving such a large sum under these unusual circumstances.
“It must be taken into account that the funds here came from a multinational that didn’t even realize the funds were missing until an audit sometime later,” Kozlowski said. “Nobody knows how they would respond if faced by the same situation.”
Concerns Over Flight Risk
In March 2023, concerns were raised that Singh might attempt to flee Australia, particularly since only $4.9 million of the mistakenly transferred funds had been recovered, with some of it already sent abroad. This concern has added another layer of complexity to the case.
Singh is set to be sentenced in September. His partner, Manivel, who was also involved, received a roughly seven-month prison sentence (time already served) and was placed on an 18-month community corrections order after pleading guilty to recklessly handling the proceeds of crime.
Rising Crypto Crime: A Broader Context
The case comes against the backdrop of increasing crypto-related crime in Australia. On July 15, the Australian Transaction Reports and Analysis Centre (AUSTRAC) released its Money Laundering National Risk Assessment, highlighting a rise in criminal use of cryptocurrencies and related services. AUSTRAC anticipates that the inherent anonymity and rapid transaction speeds of cryptocurrencies will continue to attract illicit activity.
As the legal system grapples with cases like Singh’s, the broader implications of crypto errors and crimes are becoming more evident, raising questions about accountability, the ethics of windfalls, and the evolving nature of financial crimes in the digital age.
