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Coinbase users in Georgia exploit buggy FX to bag 100x profit

Coinbase users in Georgia bank 100x profit on Bitcoin amid technical bug
TL;DR Breakdown
  • About 1,000 Coinbase users from Georgia exploited an erroneous price feed to cash out 100x crypto profit.
  • Coinbase said a third-party issue led to the mispricing of GEL crypto trading pairs.
  • The exchange has requested a clawback, and some of the users’ bank accounts have been blocked.

Earlier today, crypto traders from Georgia were reported to have exploited an erroneous price feed on the Coinbase exchange, which enabled them to withdraw their holdings at a 100x increase. The total amount lost in the incident hasn’t been officially confirmed, but a source familiar with the matter estimates it could run between $14 million and $140 million. 

Georgia users exploit buggy FX feed on Coinbase

Coinbase explained that the situation stemmed from “a third-party technical issue,” that erroneously inflated the foreign exchange rate for the bitcoin and altcoins trading pairs denominated in Georgian Lari (GEL), the fiat currency of Georgia. At the time, GEL was listed for $290 instead of $2.90, about a 100 times increase.

About 1,000 Georgian Coinbase users reportedly exploited the bug, enabling them to withdraw $100 for up to $10,000 to their local bank accounts. At the moment, however, the issue has been resolved, and the exchange has already taken action to recover all the money that may have been lost. 

We fixed the issue and and are taking action to retrieve the improperly withdrawn funds.

Coinbase

Coinbase requests clawback of funds

Coinbase has already reached out to the banks of users that took advantage of the situation, requesting that the ill-gotten funds be reimbursed to them. Some of the Georgian banks are responding to the call and have blocked the accounts of the suspected violators. In one case, a bank wrote to the user, saying:

“Hello, we have marked your transactions with Coinbase as suspicious and we’re locking all your accounts and cards. Please be aware that Coinbase may request clawback of the funds. Sorry.”

In other news, a group of cryptocurrency users led by Georgia resident George Kattula recently opened a lawsuit against Coinbase. They alleged that the company arbitrarily locked their account, which led them to incur financial losses because they could not sell underperforming tokens. 

Ibiam Wayas

Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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