Imagine waking up one morning and finding an unexpected $20 million in your bank account.
It would be pretty sweet for a moment, until you realize that money isn’t legally yours and the bank will soon correct the mistake.
But…what if the bank couldn’t do that?
Well, that hypothetical scenario became real for a few lucky users of the decentralized finance (DeFi) staking protocol Compound, which acts like a bank without all the traditional banking rules.
Now Compound’s founder is begging those users to return around $90 million, or around 280,000 COMP, that mistakenly went out. And he’s taking the ask a step further by threatening users who don’t return the money.
Compound and other DeFi protocols basically work as blockchain-based banks, allowing users to borrow money and take out loans. The platform, in turn, rewards lenders with its native COMP token.
On Wednesday, the service released an upgrade and that’s when things went downhill.
“The new Comptroller contract contains a bug, causing some users to receive far too much COMP,” explained Compound founder Robert Leshner in a tweet.
That “far too much COMP” that was overpaid to Compound’s users amounts to roughly $90 million.
And remember the earlier scenario about waking up to $20 million in your bank account? That appears to be what happened to at least one Compound user, who tweeted a screenshot of the more than 70 million COMP sitting in their account.
Another user appears to have received even more, around $29 million.
One Bitcoin developer explained to CNBC that due to the way blockchain works, there’s really no way for Compound to get its money back.
So, Leshner tweeted out a deal to users who received the COMP tokens: Return the money voluntarily and you can keep 10 percent.
However, if these users do not give up their newfound riches, Leshner says that Compound will report the income to the IRS to be taxed. Furthermore, he warned users that they would be doxxed, meaning their personal information would be made public.
The threats are bizarre.
For one thing, regardless of whether the Compound users decide to keep all the COMP tokens or just the 10 percent, they still have to report their earnings and pay taxes on them. Whether Leshner meant to imply this or not, it appears as if he’s saying that the IRS doesn’t need to know about the 10 percent a user keeps if they return the rest.
As for the doxxing claim, it appears to be an empty threat, according to CoinDesk. Compound does not collect user information.
Leshner told the crypto outlet that he views this as a “moral dilemma” for the users who received the COMP tokens. Others in the cryptocurrency community disagree, citing a popular phrase “code is law,” which basically implies that what the protocol did should be accepted as the rule. Mashable has reached to Leshner for comment.
As of publishing time, two users have returned roughly $12 million in COMP tokens to Compound, according to CoinDesk. Just about $78 million left to collect.
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