Huobi Blunder: Exchange Sends Over 900 BTC to Wrong Users

By September 27, 2014Bitcoin Business
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Huobi Blunder: Exchange Sends Over 900 BTC to Wrong Users
Huobi Blunder: Exchange Sends Over 900 BTC to Wrong Users

Chinese bitcoin/litecoin exchange Huobi is catching some flak today following a serious blunder that took place Wednesday evening, in which the company’s customer service wrongly sent 920 bitcoins and 8,100 litecoins to 27 users. To put that into perspective, that’s about $400,000 USD and $36,000 USD, respectively.

Upon learning of the events unfolding, Huobi said it temporarily halted withdrawals, but those withdrawals have since resumed.

Huobi confirmed the incident on social networking website Weibo today:

Last night, our customer service made a mistake when processing users’ withdrawal requests. This error led to 920 BTC and 8,100LTC being wrongly deposited to 27 users’ accounts. After the safety department received an alarm, the system was locked. The finance department investigated. Currently: 1, The withdrawal has resumed; 2, We have already contacted multiple users who returned 880 BTC and 5400 LTC. We apologize for the disturbance that we caused.

As noted in the company’s update, a majority of the mistakenly-sent funds have been returned by the 27 users, but there’s still some missing.

Understandably, users on the exchange are concerned about Huobi’s handling practices following the incident. In response, however, Huobi says they are overhauling how they handle withdrawals by passing requests through an audit conducted by their financial department.

In an updated posting, they write:

To prevent something like this from happening again, we will upgrade the process, switching from the current ‘system + customer service review’ to ‘system+customer service review and financial department audit.’

So, how exactly did this all happen? Huobi explains:

When the withdrawal requests were processed, the person forgot to mark the status, and reclicked. This problem will be solved by upgrading our procedure.

Huobi has removed the above statement, according to Forbes, though it was still visible in a screenshot.

The event is only proof that today’s bitcoin exchanges aren’t impervious to careless mistakes. If anything, last night’s event suggest there’s still much to be done with regard to caring for the funds of users. Looking on the positive side, though, Huobi is changing their ways.

Upon learning of the events unfolding, Huobi said it temporarily halted withdrawals, but those withdrawals have since resumed.

Huobi confirmed […]

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