Pharmaceutical company CelaCare has filed a lawsuit against stablecoin issuer Circle for a refund of 1 million USDCs sent to the wrong address due to its misoperation. Why should Circle compensate for your own input error? Is this possible in the traditional financial world?
Why is CelaCare suing Circle?
According to court documents, Celacare CEO Kenneth Yates intended to send 1 million USDC to a wallet address on the Ethereum blockchain to a partner manufacturer, but mistakenly entered the letter B in the address as the number 8, resulting in the funds not being transferred to the right address smoothly. address.
Celacare believed that Circle, the issuer of USDC, was obliged to compensate its losses, but Circle refused, so it filed a lawsuit in court.
Why does Circle have to compensate for input errors?
Judging from the documents, Celacare also admitted that it was the wrong wallet address that caused the amount not to be transferred to the partner manufacturer smoothly. But why did it ask Circle to compensate for its own mistake?
The USDC issued by Circle is centralized. Celacare uses Coinbase's account (Coinbase is also a shareholder of Circle and cooperates with Circle to operate the circulation and issuance of USDC) to transfer US dollars to the corresponding account, while Circle issues corresponding coins on the Ethereum blockchain. of USDC, and promises that Circle will assist the owner in converting it back to USD when requested.
Celacare claims that the erroneous address it sent has never been traded, and that the 1 million USDC it sent is the address's only asset. Celacare's lawyers also sent messages to this address, but have not received any response for more than a month, so Celacare believes that no one owns this address.
Celacare contends that when Circle created USDC, it gave itself the power to implement "access denial" (access denial), which allowed Circle to blacklist any Ethereum wallet address that prohibits transactions using USDC. Therefore, Celacare believes that Circle should freeze the funds or blacklist the address, and then reissue a fund and return it to Celacare.
Can I ask the bank to compensate for a transfer error?
The author has actually interviewed many bank employees. If a customer enters or fills in an incorrect bank account number, resulting in money being transferred to the wrong account, can the customer ask the bank for compensation? The unanimous response was "How is that possible?"
However, since you have to go through KYC to open a bank account, every account has its owner and its owner. The bank can help find the account owner, but it is not the bank’s responsibility to decide whether the person wants to return the money or not! Perhaps in the end, the only way to go to court is to take legal action, but the defendant will not be the bank.
Another difference is that legal currency is not issued by banks, and banks do not have the power to destroy or freeze customers' assets.
This article Input error sent millions of USDC to an unmanned wallet, suing the court for compensation from Circle. First appeared on Chain News ABMedia.
