Canadian Crypto Exchange Coinberry Files Lawsuit Against 50 Users After Losing 120 BTC

Canadian cryptocurrency exchange Coinberry has filed a lawsuit against 50 users who collectively withdrew 120 bitcoins (BTC) following a software error in 2020.

According to a court filing obtained by CoinDesk, users were able to siphon off the bitcoin with Canadian dollars that were en route but not yet received by Coinberry, following a bug in Coinberry’s Interac e-transfer software update.

“On April 13, 2020, Coinberry implemented a software update to the Coinberry Platform. Unfortunately, the said update contained a vulnerability whereby Coinberry’s system was notified of e-transfers of CAD despite the fact that the moneys had not actually been received by Coinberry,” the lawsuit read.

The lawsuit filed by Coinberry, which was acquired by crypto marketplace WonderFi (WNDR) in July, also names the Binance crypto exchange, as it was a venue several customers used to transfer approximately 9.48 of the misappropriated BTC.

Initially over 500 customers exploited the vulnerability, with 37 bitcoins being returned following a request from Coinberry.

“Coinberry contacted all of the said 546 affected registered users by email and demanded return of the misappropriated bitcoins,” the lawsuit read. “Coinberry also immediately contacted Binance.”

The lost funds raises questions over the risks firms take when handling irreversible assets like cryptocurrencies. Last week, a Solana-based decentralized finance (DeFi) protocol lost $660,000 worth of crypto when it made a programming blunder.

On Aug. 25, Coinberry's parent company, WonderFi, applied to start trading on the Nasdaq. It currently trades on the Toronto Stock exchange.

Coinberry did not immediately respond to CoinDesk's request for comment.

The Financial Post initially reported on news of the filing.

UPDATE (Sept. 8, 21:50 UTC): Added details from the court filing throughout, updated the number of bitcoins in fifth paragraph and removed ‘Report’ from the headline.