Coinbase users in Georgia exploit buggy FX to bag 100x profit

Earlier today, crypto traders from Georgia were reported to have exploited an erroneous price feed on the Coinbase exchange, which enabled them to withdraw their holdings at a 100x increase. The total amount lost in the incident hasn’t been officially confirmed, but a source familiar with the matter estimates it could run between $14 million and $140 million. 

Georgians are celebrating the gainz! pic.twitter.com/3GxHanJuqW

— Bitcoin Archive (@BTC_Archive) September 2, 2022

Georgia users exploit buggy FX feed on Coinbase

Coinbase explained that the situation stemmed from “a third-party technical issue,” that erroneously inflated the foreign exchange rate for the bitcoin and altcoins trading pairs denominated in Georgian Lari (GEL), the fiat currency of Georgia. At the time, GEL was listed for $290 instead of $2.90, about a 100 times increase.

About 1,000 Georgian Coinbase users reportedly exploited the bug, enabling them to withdraw $100 for up to $10,000 to their local bank accounts. At the moment, however, the issue has been resolved, and the exchange has already taken action to recover all the money that may have been lost. 

We fixed the issue and and are taking action to retrieve the improperly withdrawn funds.

Coinbase

Coinbase requests clawback of funds

Coinbase has already reached out to the banks of users that took advantage of the situation, requesting that the ill-gotten funds be reimbursed to them. Some of the Georgian banks are responding to the call and have blocked the accounts of the suspected violators. In one case, a bank wrote to the user, saying:

“Hello, we have marked your transactions with Coinbase as suspicious and we’re locking all your accounts and cards. Please be aware that Coinbase may request clawback of the funds. Sorry.”

Some coinbase users saw this amazing opportunity of arbitrage, sold their assets and withdrew money on their bank accounts.

In few hours, one of the worst Georgian banks – TBC – blocked ALL of their accounts and ALL their money.

— Levan Ilashvili (@LevanIlashvili) August 31, 2022

In other news, a group of cryptocurrency users led by Georgia resident George Kattula recently opened a lawsuit against Coinbase. They alleged that the company arbitrarily locked their account, which led them to incur financial losses because they could not sell underperforming tokens.