Compound Founder Threatens to Report to the IRS an Account that Mistakenly Received $20 Million if Money is not Returned

Urian B., Tech Times 01 October 2021, 09:10 pm

(Photo : Image from Unsplash Website) Compound Founder Threatens Account of Reporting It to the IRS After Mistakenly Sending It $20 Million

Compound's founder is now threatening an account that mistakenly received $20. The founder will report the account to the IRS if it does not return the mistakenly received $20 million. The full story is that Compound's founder is now begging users to return around $90 million or about 280,000 COMP that was mistakenly sent out.

Mistakenly Sent Money

According to Mashable, the founder is now taking things a step further by threatening users who will not return the money. Compound, as well as other DeFi protocols, work as certain blockchain-based banks. These allow users to borrow money and also take loans.

The platform then rewards its lenders with their native COMP token. The service just recently released an upgrade, and it was noted that things started to go downhill from there. Robert Leshner, the founder of Compound, tweeted out that the new Comptroller contract contains some sort of bug which gave some users way too much COMP.

Around $90 Million Mistakenly Sent

The supposed "far too much COMP" was reportedly overpaid to Compound's own users, amounts to about $90 million. The mistakenly sent $20 million appears to have been sent to just one Compound user that tweeted out a screenshot of having over 70 million COMP on their account.

Another user actually appears to have received around $29 million. A certain Bitcoin developer explained to CNBC that due to how blockchain works, there's actually no way for Compound to get its money back.

Compound IRS Report Coming

Leshner also tweeted out that those that return the money will reportedly be able to keep 10%. Leshner notes that Compound will report the income directly to the IRS to be taxed. He now warns users that they will reportedly be doxxed, which means their personal information will be made public.

Compound still has to report their own earnings and pay taxes on them. The article by Mashable notes that the IRS does not need to know about the said 10% a user will keep if they choose to return the rest. Another way to get free coins is through airdrops.

If you received a large, incorrect amount of COMP from the Compound protocol error:

Please return it to the Compound Timelock (0x6d903f6003cca6255D85CcA4D3B5E5146dC33925). Keep 10% as a white-hat.

Otherwise, it's being reported as income to the IRS, and most of you are doxxed.
— Robert Leshner (@rleshner) October 1, 2021

COMP Tokens

When it comes to the doxxing claims, it now actually seems like an empty threat. CoinDesk notes that Compound actually does not collect its users' information. Leshner stated to the crypto outlet that he actually looks at the issue as a "moral dilemma" for certain users who received the said COMP tokens.

There are others in the cryptocurrency community who now disagree while citing a popular phrase saying "code is law." This basically implies that what the protocol did should not really be accepted as the rule, according to CoinDesk.

Mashable reportedly reached out to Leshner for a comment. When the article was written, there was already $12 million in COMP tokens that were returned and just about $78 million left to be collected. Another issue as of the moment is whether BNB is manipulated or not.

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Written by Urian B.