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Defi System Compound Mistakenly Gives $90M Crypto to Users

The popular decentralized finance system Compound gave $90 million in crypto tokens to users, thanks to a system-upgrade error.

A popular decentralized finance system called Compound has mistakenly given out $90 million in crypto tokens to users, thanks to a system upgrade screw-up.

So-called defi systems allow users to transact with each other directly.

Founder Robert Leshner is pleading for it back, and issuing threats, too, CNBC reports.

If you received a large, incorrect amount of COMP from the Compound protocol error:

Please return it to the Compound Timelock (0x6d903f6003cca6255D85CcA4D3B5E5146dC33925),” he tweeted.

“Keep 10% as a white hat. Otherwise, it's being reported as income to the IRS, and most of you are doxxed.”

Dox means to publish private or identifying information about someone on the Internet.

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Leshner later had second thoughts about his tweet. “I'm trying to do anything I can to help the community get some of its COMP back, and this was a bone-headed tweet/approach,” he wrote in his second tweet.

“That's on me. Luckily, the community is much bigger, and smarter, than just me. I appreciate your ridicule and support.”

Among the ridiculing tweets came one from a user named kiki. “I'm not really following the logic here,” the tweet read.

“The recipients can report the ‘airdrop’ with a 0 cost basis and pay tax short-term cap gains of 40% to the IRS OR give you 90% and still owe tax on the entire amount they claimed?”

So does Compound have any chance of getting its money back?

“Alchemix [another decentralized finance platform] had a similar incident a few months back, where they gave out more rewards than intended,” blockchain security researcher Mudit Gupta told CNBC. 

“Almost everyone who got the extra rewards refunded the extra.”

But Alchemix had lost just $4.8 million.