Coinbase Glitch Allows Georgian Traders To Sell Crypto At 100 Times Its Value
An hours-long bug by crypto exchange Coinbase has allowed numerous traders from the country of Georgia to sell their cryptocurrencies for as much as 100 times their market value at other exchanges. The company is currently attempting to retrieve the funds from bank accounts in the nation that lies at the intersection of Eastern Europe and Asia.
An error that is believed to be caused by a third party provider allowed an estimated 900 Georgian traders to sell various cryptos at a highly profitable exchange rate for the country’s fiat currency, GEL, which is currently priced at about USD 0.35 per GEL 1.
“In late August, prices for cryptos denominated in Georgia’s national currency had been rated at GEL 290 instead of GEL 2.90. The missed decimal point had been due to a ‘third-party technical issue,’” a spokesperson for Coinbase told Blockworks.
This said, the pocketed profits might not stay with the traders for long, as indicated by Coinbase’s rapidly launched campaign to collect the funds.
Shortly after withdrawing related funds from Coinbase, Georgians said they received notification from their financial institutions advising them their bank accounts and associated Visa debit cards had been frozen.
“Hello, we have marked your transactions with Coinbase as suspicious and we’re locking all your accounts and cards,” reads a text message one Georgian bank sent to its customer. “Please be aware that Coinbase may request clawback of the funds. Sorry.”
As of 9 a.m. UTC, Georgia was not included on Coinbase’s list of supported countries, in contrast with its neighbors Armenia and Turkey.
A Georgian trader commented that Coinbase was to be blamed for “multiple levels of failure” as they “had no checks. Even worse, when they detected unusual activity, which they should have detected, they failed to act on it for over seven hours.”
Meanwhile, Georgia’s government is making efforts to update its crypto regulation in line with the European Union in the hope that the move will help the nation become a “hub” for the global industry. Earlier this month, Georgian Deputy Prime Minister and Minister of Economy and Sustainable Development Levan Davitashvili said a “bundle” of draft bills had been sent to the country’s parliament.