Free Bitcoin? Lender BlockFi mistakenly sends some users crypto

The startup said it made incorrect promo payouts in Bitcoin rather than US dollars and is working on fixing the issue, but some recipients already withdrew the coins before the company could backpedal.

BlockFi Inc., a crypto-lending startup, mistakenly sent some users Bitcoin as part of a promotion and is working on reversing it. The company made what it called incorrect promo payouts in Bitcoin instead of U.S. dollars to certain customers. Though BlockFi worked on reversing them, a number of recipients withdrew the coins before the company could backpedal. (It was fewer than 100, the company said.) The firm’s exposure is around $10 million, though that amount is decreasing as more users return the coins, said Zac Prince, co-founder and chief executive officer of BlockFi. “BlockFi carries loss reserves as part of its accounting policies and this is a fraction of existing loss reserves — so no negative impact to equity or ongoing platform operations,” Prince wrote by email. “The issue that caused the withdrawals was fixed and incremental safeguards have been developed to prevent any similar issue in the future.”