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Imagine waking up one morning and finding an unexpected $ 20 million in your bank account.
That would be pretty nice for a while, until you realize the money isn’t legally yours and the bank will fix the mistake soon.
But … what if the bank couldn’t do that?
Well, this hypothetical scenario became real for a lucky few users of the Decentralized Finance Staking Protocol (DeFi), which acts like a bank without all the traditional banking rules.
Now, the founder of Compound is begging these users to pay back around $ 90 million, or around 280,000 COMP, which was spent in error. And it goes even further by threatening users who don’t return the money.
Compound and other Challenge The protocols essentially work like blockchain-based banks, allowing users to borrow money and take out loans. The platform, in turn, rewards lenders with its native COMP token.
The service released an upgrade on Wednesday and that’s when things took a turn for the worse.
“The new controller contract contains a bug, which causes some users to receive far too much COMP,” Compound founder Robert Leshner explained in a Tweeter.
This “far too many COMP” overpaid to Compound users amounts to around $ 90 million.
And remember the previous scenario of waking up with $ 20 million in your bank account? This seems to be what happened to at least one Compound user, who tweeted a screenshot of the more than 70 million COMP seated on their account.
Another user seems to have received even more, approximately $ 29 million.
A Bitcoin developer explained to CNBC that because of how the blockchain works, there really is no way Compound can get their money back.
So, Leshner tweeted an agreement to the users who received the COMP tokens: Return the money voluntarily and you can keep 10 percent.
However, if those users don’t give up their newfound wealth, Leshner says Compound will report the income to the IRS to be taxed. Additionally, it warned users that they would be doxxed, meaning their personal information would be made public.
The threats are bizarre.
For one thing, whether Compound users decide to keep all COMP tokens or just the 10 percent, they still have to report their income and pay taxes on them. Whether Leshner wanted to involve him or not, it appears he’s saying the IRS doesn’t need to know 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 information about users.
Leshner told the crypto outlet that he viewed this as a “moral dilemma” for users who received COMP tokens. Other members of the cryptocurrency community disagree, citing a popular phrase “the code is the law,” which essentially implies that what the protocol did should be accepted as a rule. Mashable has reached out to Leshner for comment.
At the time of publication, two users have returned around $ 12 million in COMP tokens to Compound, according to CoinDesk. Only $ 78 million remains to be collected.
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