A New Zealand cryptocurrency investor ended up fighting for an $11,000 refund from a United States crypto payment service over a mistake worth a fraction of a cent.
Auckland man Bruno Boni, a senior systems administrator and developer, has invested in cryptocurrencies for four years. Two weeks ago he decided to use some of his crypto savings to buy 250 silver coins from New Zealand company Gold Survival Guide, worth NZ$10,945.
“They’re a good company, [co-founder] David [Deutsch] did a good job, and they have a good price,” said Boni.
Gold Survival Guide used BitPay for customers wanting to use cryptocurrencies, sending Boni a BitPay invoice for the payment for the silver.
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“I did a quick Google, it looks like a reasonable company, they have 80 employees, they have a good size, they’re based in Georgia in the US, they look trustworthy, and then David said he was using them for a while now and everything looked OK,” he said.
Boni sent the funds, including a NZ$110.56 fee, from his crypto wallet at US-based exchange Kraken to the address that BitPay had sent him. He decided to use Dogecoin, the alternative cryptocurrency inspired by a popular 2013 meme,
Dogecoin is worth only about US5 cents, so the amount meant to be sent to BitPay by Kraken was large – 142,531.110944 Dogecoin.
However, Kraken truncated everything after the decimal point, sending 142,531.11 Dogecoin to BitPay instead, with the missing amount the equivalent of US005c.
“So Bitpay sent me an email, saying yes we received your payment, but it was underpaid because on the last decimal it wasn’t matching, so they said no problem, we’ll just refund you the full amount,” he said.
A refund was the only option offered, and Boni decided to complete the order once he received the refund. BitPay said it would perform the refund between 24 and 48 hours
Boni created a new address at Kraken to receive the refund, sent the link to BitPay, and was told the refund had been made. However, when he checked his digital wallet the next day, it was empty, while an unrelated wallet belonging to someone else had received the exact amount at the same time.
“I got in touch with them, I opened a case explaining everything and their support was quite blunt, saying oh you probably just did something wrong, our systems don’t fail, you probably entered the wrong address or something. So I sent again all the screenshots, and on their last email they confirmed again my correct address.
“So I explained again, and they just stopped replying altogether.”
He tried reaching them through social media and LinkedIn but received no answers.
An hour after Stuff contacted the company for comment, Boni received an email from BitPay sent at 9pm on Sunday, US time, offering a refund which he received on Tuesday morning.
He was told that the system had marked the transaction as being executed, but the transaction was never confirmed.
BitPay media spokesperson Jan Jahosky said the situation had been escalated to the company’s customer support team.
“A resolution including a refund is in process and our customer will receive reimbursement this week. Supporting our customers is an important priority.”
BitPay had only just begun accepting Dogecoin. Boni believed either BitPay’s system failed, or an employee had manually pointed that transaction to a different wallet.
“That’s why I thought they’d be quite keen initially to find a bug, because if this happened to me maybe it happened to more people. It was a considerable amount, but some people transact over $100,000, millions of dollars.
“I have a four-year-old account with Kraken which is the second or third-largest exchange in the US, I have another account with Binance which is the largest exchange in the world. This is really business as usual, and sending to the wrong wallet is like catastrophic failure … the company needs to own it because it’s on them.”
Regulators have been concerned about retail investors shifting from share trading to the higher risk investment. The Financial Markets Authority has warned that crypto was “high risk and highly volatile”.
Boni began putting some of his cash into cryptocurrencies four years ago, first just playing with it then investing in it.
“After a while you get some returns, some wins and losses of course, and then I just wanted to cash out some of that in silver just because it’s another form of investment.”
He has since decided to keep his refund invested in crypto, and cash out of it at some point in the future.
David Deutsch of Gold Survival Guide said he had not come across problems with BitPay in the four years his company had been dealing with the exchange.
Bitcoin transactions were not common, about 10 a year, he said.