Georgia.  Coinbase bug multiplies traders' profits by 100

In Georgia, traders took advantage of a bug for several hours. The specific USDT/GEL pair showed a crazy rate: 1 USDT for 290 GEL, which is 100 times more than the market price. Two Georgian banks have blocked their customers’ accounts and Coinbase wants their funds back.

After’s gross comma error last year, which refunded $7.2 million instead of $70 to a customer, it’s Coinbase’s turn to get the decimals wrong.

Georgian traders took advantage of the bug

The oversized exchange rate was reportedly active for almost seven hours. More than 900 Georgia-based traders took advantage of the bug that announced on the Georgian lari (GEL). Coinbase now wants its funds back. Bank accounts of Georgian users are locked.

At the end of August, crypto prices denominated in the Georgian national currency had been valued at 290 GEL instead of 2.90 GEL. The missing decimal was due to a third-party technical problem a Coinbase spokesperson told Blockworks.

coinbase freeze georgia

Coinbase’s losses

According to a first estimate, the losses for Coinbase would be between 14 and 140 million dollars: Coinbase has refuted this claim. Shortly after withdrawing the affected funds from the exchange, the Georgian traders said they received a notification from their bank informing them that their account and bank card had been blocked.

Traders explained that the methods to take advantage of the bug ranged from arbitrage between exchanges to simply selling the crypto bought on Coinbase and withdrawing it in fiat.

[Il y avait] multiple levels of failure from Coinbase said one of the Georgian traders. ” They had no control. Worse still, when they detected unusual activity, which they should have detected, they did not act for more than seven hours. »

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Funny period for Coinbase which is also the subject of an investigation by the SEC for its products of staking and yield farming. In the state of Georgia, in the United States this time, a hundred customers are suing the exchange. Security vulnerabilities would be involved. We have lost count of Coinbase’s setbacks this year: exchange lawyers are starting to be overwhelmed with cases…

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