DeFi Platform Suffers Cryptocurrency Transfer Incident Worth 106.2 Billion KRW

(Photo by CNBC)

[Asia Economy Reporter Yujin Cho] Popular decentralized finance (De-Fi) service platforms experienced an error that mistakenly transferred $90.1 million (approximately 106.2 billion KRW) worth of cryptocurrency to users, Bloomberg News reported on the 1st (local time).

According to the report, De-Fi platform Compound announced that an error occurred during an update process starting on the 29th of last month, resulting in a large amount of COMP being sent to some users.

Robert Leshner, CEO of Compound, wrote on Twitter, "Due to this bug, too much COMP was sent to some users," and requested its return.

He added, "Keep 10%. If you don't (return the rest), it will be reported as income to the U.S. Internal Revenue Service (IRS), and most of you will be identified."

De-Fi stands for decentralized finance, which refers to financial transactions conducted between users through "smart contracts" controlled by computer code without the control or intervention of banks or intermediaries, using blockchain technology.

Meanwhile, this incident has been evaluated as clearly exposing the vulnerabilities of De-Fi, which is emerging as a viable alternative to traditional financial systems.

Bloomberg stated, "This error is an embarrassing event for cryptocurrency platforms that have hoped to overturn traditional financial systems."

Andrew Park, senior policy analyst at Americans for Financial Reform (AFR), an investor advocacy group, pointed out, "There are reasons to criticize the existing banking system, but (in traditional financial systems) there are many safeguards to prevent such incidents."