IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

Buggy DeFi update mistakenly issues $90m worth of COMP coins to users

Founder of Compound Labs pleads with users to return the money or risk action from the IRS

Someone checking online crypto markets while holding a coin

Around $90 million has been mistakenly sent to users of popular DeFi staking protocol Compound following a bug in a recent upgrade.

The company's founder took to Twitter to plead with users to return the platform's crypto tokens, while also threatening those refusing to do so.

"If you received a large, incorrect amount of COMP from the Compound protocol error: Please return it," Robert Leshner, founder of Compound Labs, tweeted on Thursday. "Keep 10% as a white-hat. Otherwise, it's being reported as income to the IRS, and most of you are doxxed."

Compound is a decentralised finance (DeFi) platform with a liquidity mining program that rewards depositors and borrowers, but usually at a rate of a single-digit for annual percentage yield (APY).

A user known as 'napgener' first noticed an issue with Compound payouts, flagging three Ethereum transactions where users received around $15 million in COMP tokens in exchange for borrowing and supplying small token quantities for the likes of USDC, ETH and DAI.

DeFi protocols like Compound are designed to recreate traditional financial systems, such as banks and exchanges, but with blockchain powered by automated smart contracts. On Wednesday Compound attempted to roll out an upgrade, but it appears to have included an error.

"The new Comptroller contract contains a bug, causing some users to receive far too much COMP," Leshner said. "There are no admin controls or community tools to disable the COMP distribution; any changes to the protocol require a 7-day governance process to make their way into production."

Related Resource

Pharma transactions during the COVID-19 pandemic

How resilient were they?

Whitepaper front coverFree download

More and more users began reporting over payments after Leshner tweeted about the bug: $29 million worth of COMP has been claimed in one transaction, while another has said they received 70 million COMP tokens (thought to be worth about $28m).

Leshner didn't specify the issue with the update, however a developer from another DeFi crypto exchange, SushiSwap, tweeted that the fault could be blamed on a "one-letter bug" in the code.

Featured Resources

Accelerating healthcare transformation through patient-centred medtech solutions

Seize the digital transformation opportunities to streamline patient care and optimise patient outcomes

Free Download

Big payoffs from big bets in AI-powered automation

Automation disruptors realise 1.5 x higher revenue growth

Free Download

Hyperscaler cloud service providers top ten

Why it's important for companies to consider hyperscaler cloud service providers, and why they matter

Free Download

Strategic app modernisation drives digital transformation

Address business needs both now and in the future

Free Download

Recommended

The financial services survival guide
Whitepaper

The financial services survival guide

13 Oct 2022
Big data for finance
Whitepaper

Big data for finance

1 Sep 2022
Operationalising anti-fraud on the mainframe
Whitepaper

Operationalising anti-fraud on the mainframe

5 Apr 2022
Revolutionising the lending process with IBM Cloud Paks
Whitepaper

Revolutionising the lending process with IBM Cloud Paks

1 Apr 2022

Most Popular

Empowering employees to truly work anywhere
Sponsored

Empowering employees to truly work anywhere

22 Nov 2022
Larger monitors aren't all they're cracked up to be
monitors

Larger monitors aren't all they're cracked up to be

3 Dec 2022
Defra's legacy software problem 'threatens' UK gov cyber security until 2030
Business strategy

Defra's legacy software problem 'threatens' UK gov cyber security until 2030

6 Dec 2022