Now a judge in southeastern Australia has ordered the sale of the property – which the woman apparently bought as a gift for her sister living overseas – and awarded all proceeds from the sale to the crypto company.
The cautionary tale has attracted international attention, especially since it emerged that it took Crypto.com seven months to discover the flaw.
Katie Gregory, a spokeswoman for Crypto.com, wrote that the company could not comment “as the matter is before the courts.”
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Crypto.com is best known outside the cryptocurrency world as the company whose name now adorns the former Staples Center in Los Angeles – and for Super Bowl commercials featuring actor Matt Damon and basketball star LeBron James referring to cryptocurrency investors as pioneers, under the slogan ” Fortune favors the brave.”
It laid off 5 percent of the company’s workforce in June amid a widespread decline in the cryptocurrency market.
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The Supreme Court of Victoria heard that in May 2021 Crypto.com, operating under a different company name in Australia, mistakenly transferred about $7.2 million to Thevamanogari Manivel instead of the repayment of about $68. The error occurred when an employee accidentally filled in the payment amount field with an account number, the court said.
“Extraordinarily, the plaintiffs allegedly did not realize this significant error until some 7 months later, at the end of December 2021,” during an audit, the court said in its ruling. In February, after looking into what was happening, the company sought to place an order freezing Manivel’s accounts to recover the full amount, according to the background of the case released by the court.
However, Crypto.com submitted evidence showing Manivel had already transferred most of the money to an account held with another defendant, who may have been in a “romantic relationship” with Manivel, according to evidence heard by the court. Manivel also sent almost $300,000 to her daughter and in February bought a property in Craigieburn worth $925,000 for her sister, Thilagavathy Gangadory, who lives in Malaysia.
The four-bedroom, four-bathroom mansion about 20 miles north of Melbourne sits on more than 5,800 square meters of land and has a private cinema, a gym and parking for two cars, according to Australian website realestate.com.au.
Lawyers for Manivel and Gangadory were not listed on the judgment document.
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Crypto.com’s Australian companies have been engaged in legal proceedings against Manivel, Gangadory and six other defendants since. In May, Judge James Dudley Elliott entered a default judgment in the case against Gangadory – meaning she did not file a notice of appearance by the deadline set by the court. Elliott thus ruled in favor of the plaintiff, Foris GFS Australia Pty Ltd., which helps operate Crypto.com’s trading platform in Australia.
The company’s lawyers were apparently unable to reach Gangadory, the court said, although she seemed aware the case was ongoing because her sister’s lawyers said in March that Gangadory was seeking legal advice.
Under the judge’s ruling, published last week, Foris GFS was awarded all proceeds and interest from the sale of the Craigieburn property. Gangadory was ordered to pay the company’s legal costs related to the case, as well as 10 percent interest, which amounts to nearly $19,000, the court said.
Gangadory can appeal, but she must provide “a good reason for not submitting documents, a valid defense to the case, and give reasons why the court should not have made the order” against her, according to the Victoria County court. The next court date is October 7, when the judge will outline the next steps in the case in what is known as a “guidance hearing.”