CoinZest Trying To Recover $5.3 Million Worth of Cryptocurrency in Accidental Airdrop

By Prashant Jha

The South Korean Exchange CoinZest is trying to recover cryptocurrencies worth $5.3 million which it accidentally airdropped. The incident took place when a minor error led to the airdropping of main cryptocurrencies like Bitcoin and Ethereum instead of the ‘We Game Token’ during a promotional event.

The recent incident highlights one of the few shortcomings of blockchain i.e immutable and irreversible nature of blockchain transactions. The firm said that the said incident happened because of a computer glitch.

An official from the exchange said,

“About 10 members tried to sell about KRW 600 million worth [~$530,000 USD] of cryptocurrencies or to withdraw money in Korean won even though they recognized the mistake of depositing money and computer errors. [Therefore] there has been a problem of rapid price decline.”

Half of the Misplaced Cryptocurrency Has Been Returned

The .officials from the Exchange confirmed that almost half of the misplaced cryptocurrencies have been recovered. Users have returned almost half of the cryptocurrencies which were distributed due to a computer glitch, while at least $2.6 million worth of cryptocurrencies is yet to be recovered.

When asked about the users and whether they would be compensated for the loss they have suffered due to the glitch on Exchange, the firm did not seem to have given it a thought and there are no plans in the pipeline to compensate the users who have suffered due to the recent glitch.

Final Thoughts

Whether the recent computer glitch in CoinZest Exchange was solely because of a software issue or because of a human error could not be verified. However, whatever may be the cause, the recent incident points out one of the few glaring problems with blockchain.

Since the sole focus has always been on creating an anonymous and censorship-resistant form of exchange not much thought process has gone into situations like these, where the transactions can be reversed. The best option could be the use of smart contracts in Airdrops as well, where the exchange can hardcode a time limit to reverse the transaction and avoid an embarrassing situation like this in the future.