The startup stated that it used Bitcoin instead of U.S. dollars for incorrect promotional spending and is working to resolve the issue, but some recipients have withdrawn the tokens, and then the company can withdraw its capital.

BlockFi Inc., a crypto lending startup, mistakenly sent bitcoin to certain users as part of a promotion, and is working to reverse this situation.

The company used Bitcoin instead of U.S. dollars to pay some customers allegedly incorrect promotional expenses. Although BlockFi is committed to reversing them, many recipients withdrew their coins before the company could return them. (The company stated that the number is less than 100.) The company’s risk exposure is about $10 million, although this amount is declining as more users return coins, BlockFi co-founder and chief executive officer Officer Zac Prince said.

Prince wrote in an email: “BlockFi uses loss reserves as part of its accounting policy. This is a small part of the existing loss reserves, so it will not have a negative impact on equity or ongoing platform operations.” The issue of withdrawals has been resolved, and step-by-step safeguards have been developed to prevent any similar problems in the future.”

He added that the wrong deposit did not affect BlockFi’s continued operations, and the company’s transaction volume reached a record level without interruption.

At the same time, screenshots of deposits went on a tour on social media, and at least one Tweet showed a deposit of 700 bitcoins. Despite the sharp decline this week, the trading price of each coin on Wednesday was approximately $34,000.

Last week, BlockFi tweeted that certain promotion participants “may see incorrect bonus payments in their transaction records.”

Some customers participating in the March transaction promotion may see incorrect bonus payments in their transaction history. Our team is working hard to resolve it and will reflect the appropriate amount in the short term.

-BlockFi (@BlockFi) May 15 2021

At the same time, the company sent an email to the affected users requesting the refund of the money.

Am I correct to think that BlockFi should send $701 but send 701 bitcoins to this person? ? pic.twitter.com/hlFtckSWyA

—Rick Burton (@ricburton) May 19, 2021

BlockFi is perhaps the most well-known non-bank cryptocurrency company. It offers many crypto products, including lending, and it runs a platform for trading cryptocurrencies. It has been the focus of attention during the cancellation of the cryptocurrency market’s rebound in recent months.

The cryptocurrency company’s move reminds people of the $500 million mistake that Citigroup Inc. made last summer when it accidentally sent payments to a group of lenders.

TrueMark Investments CEO Mike Loukas said of BlockFi: “As a standalone device, this is just a glitch.” “We have been denominated in US dollars in the bank. But because this is a volatile asset, the mistake was made. Zoomed in.”