Woman forced to sell 4-bed house after crypto exchange wrongly refunded $7.2m

Payment from Crypto.com was off by five zeroes because bank account number was mistakenly entered

An Australian woman has been sued after she received part of an erroneous refund from a cryptocurrency exchange – erroneous by five zeroes – that it failed to notice for seven months.

Documents from the Supreme Court of Victoria reveal that plaintiffs Foris GFS Australia Pty Ltd and Foris AU Pty Ltd, the corporate entities that run Crypto.com, made claims against eight defendants in relation to a mistaken payment to Thevamanogari Manivel.

In May 2021, A$10.5 million ($7.2 million) was transferred into Manivel's account "after an account number was accidentally entered into the payment amount field by a representative of the second plaintiff," the court documents state. "Extraordinarily, the Plaintiffs allegedly did not realise this significant error until some seven months later, in late December 2021."

The intended amount was A$100 (about $68.50).

However, the court heard that during this time, instead of informing Crypto.com of the mistake, Manivel had allegedly disbursed the wealth among six other people – including in the form of a A$1.35 million ($924,743) four-bedroom, four-bathroom house in the Melbourne suburb of Craigieburn as a "gift" for her sister, Thilagavathy Gangadory, who lives in Malaysia.

From February 2022, Foris sought to freeze Manivel's account with the Commonwealth Bank of Australia, which was also named as a defendant "but no substantive final relief was sought against it." This led to the other accounts that had received money from Manivel to be frozen as well, one of which was her daughter's.

The plaintiffs alleged that the Craigieburn house was bought entirely with funds from the wrongful payment. Two weeks after Manivel's assets were frozen, Gangadory was made registered owner of the property.

Attempts were made to freeze Gangadory's account but these failed because she never responded to emails from the plaintiffs' legal team. The only communication that acknowledged the proceedings was an email reply to Manivel's solicitors saying: "Received, thank you."

No representatives for Gangadory showed up at court, so judge Mr Elliott handed down a default judgment on Friday saying that Gangadory would have to sell the house and return the proceeds, pay interest for the amount of time she held onto the money, plus costs.

He said: "It is established that the Craigieburn property was acquired with funds traceable to the wrongful payment and would never have been in Gangadory's hands if the wrongful payment had not been made.

"Thus, Gangadory was unjustly enriched by receiving the purchase price of the Craigieburn property out of the wrongful payment... Accordingly, I was satisfied that the orders relating to the sale of the Craigieburn Property were appropriate."

The court documents made "an order that Gangadory pay interest to the first plaintiff calculated from 1 March 2022 to the date of judgment... Applying the statutory interest rate payable on judgment debts, being 10 percent, the sum of $27,369.64 was awarded."

More orders have been made against the other defendants who received money from Manivel to recover the full amount. ®