A pharmaceutical company is taking legal action against stablecoin provider Circle and is demanding a refund after its CEO mistakenly sent $1 million worth of USDC to the wrong wallet address.
CelaCare filed a lawsuit in a Massachusetts district court this week alleging that the USDC was “irretrievably lost” when its CEO, Kenneth Yates, inputted the incorrect Ethereum wallet address.
The USDC was transferred from CelaCare’s Coinbase account to a contract counterparty on July 3, 2024. The lawsuit states, “When Yates copied the destination address from a document provided by the counterparty, Yates’s computer mistakenly interpreted a ‘B’ as an ‘8’.” This error occurred as Yates attempted to copy and paste the address from a PDF without verifying the accuracy.
Consequently, CelaCare contends that Yates sent the cryptocurrency to a wallet address that cannot be accessed by anyone. To confirm the inaccessibility of the funds, CelaCare sent a message to the address stating, “On July 3, 2024, Celacare Technologies Inc. erroneously sent one million USDC to this address. If you have the private key to this wallet address, please send 1.46 USDC to any address and contact us at [email protected].” No response was received, leading CelaCare to conclude that the USDC is effectively lost.
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The company argues that Circle should reimburse the cryptocurrency since its USDC stablecoin is considered a “financial asset,” while Coinbase is classified as a “securities intermediary” under the Uniform Commercial Code (UCC). Due to this distinction, CelaCare asserts that the UCC legally obligates Circle to either reissue the funds or honor them.
CelaCare sent a letter to Circle on August 15 along with the draft of the lawsuit, requesting the return of the funds. However, on September 6, Circle’s legal representatives rejected CelaCare’s refund request.
CelaCare is seeking a jury trial and is requesting the court to affirm that the USDC was lost. The company aims to receive $1 million, either in USDC or fiat currency, or alternatively, for Circle to compensate them with an equivalent value of $1 million.
Tether, the largest USD-backed stablecoin, offers a token recovery service where it may choose to burn and reissue tokens in similar cases for a fee of 10%.