Customers of crypto exchanges are given specific addresses to send their deposits to. (similar to bank account numbers). However no exchange lists every single token on the market. It is unfortunately common in the business for a customer to send a "non-listed token" to his account at the exchange. When this happens, the non-listed token can still "land" in the customer's "wallet" (or "safety deposit box") at the exchange, but the exchange will not credit the crypto to the customer's account, nor will they return it.
An analogy would be a customer mistakenly leaving pesos in the night depository of a bank which states it only accepts USD. I believe that any court would require that the bank return the pesos, assuming the customer asks for the return in a timely manner.
A cursory visit through any crypto forum will show that this type of mistake is common. It even happens to veterans in the crypto world. For example, one transfers USDC to his exchange, instead of USDT.
Thankfully some exchanges will return the assets, and some will not. Some charge a fee for the recovery. Sometimes it take six months or more of waiting.
Note that since crypto transfers are recorded and kept in a public ledger, one can examine a transfer and determine whether or not it was successful, and exactly what address the crypto was sent to.
Thus, even unlisted tokens can be verified to have landed in a customer's wallet at an exchange.
I've made the mistake described above, and my exchange refuses to return the crypto. They also require mandatory arbitration. However they also first require a notice of dispute, before going to arbitration.
I'm not an attorney but am somewhat familiar with legal principles, and I've also been looking at case law on the specific concept of "unjust enrichment." In a number of appellate cases I've read, a plaintiff is entitled to restitution if a transfer is made by mistake, even if the recipient does not spend the money. The fact remains that the defendant is in possession of the plaintiff's assets, and it is unconscionable for the defendant to keep them.
I want to draft a demand letter citing some of these cases, but it would help if an expert in the law and familiar with crypto transfers could comment on my assumption that the principle of unjust enrichment is at play here. I can send copies of several appellate decisions if it helps.
Naturally when I've brought up this issue in other forums where non-attorneys will answer, I've been blamed for not being more careful when I do transactions. Or I've been told that my crypto is "lost forever." Please understand that while I appreciate your intent to help, what I'm posting here is a legal question regarding the somewhat arcane (but valid) principle of unjust enrichment.
Also, I'm aware that US-based Crypto Exchanges are not (yet) regulated by the CFTC or SEC.
Thanks so much!
An analogy would be a customer mistakenly leaving pesos in the night depository of a bank which states it only accepts USD. I believe that any court would require that the bank return the pesos, assuming the customer asks for the return in a timely manner.
A cursory visit through any crypto forum will show that this type of mistake is common. It even happens to veterans in the crypto world. For example, one transfers USDC to his exchange, instead of USDT.
Thankfully some exchanges will return the assets, and some will not. Some charge a fee for the recovery. Sometimes it take six months or more of waiting.
Note that since crypto transfers are recorded and kept in a public ledger, one can examine a transfer and determine whether or not it was successful, and exactly what address the crypto was sent to.
Thus, even unlisted tokens can be verified to have landed in a customer's wallet at an exchange.
I've made the mistake described above, and my exchange refuses to return the crypto. They also require mandatory arbitration. However they also first require a notice of dispute, before going to arbitration.
I'm not an attorney but am somewhat familiar with legal principles, and I've also been looking at case law on the specific concept of "unjust enrichment." In a number of appellate cases I've read, a plaintiff is entitled to restitution if a transfer is made by mistake, even if the recipient does not spend the money. The fact remains that the defendant is in possession of the plaintiff's assets, and it is unconscionable for the defendant to keep them.
I want to draft a demand letter citing some of these cases, but it would help if an expert in the law and familiar with crypto transfers could comment on my assumption that the principle of unjust enrichment is at play here. I can send copies of several appellate decisions if it helps.
Naturally when I've brought up this issue in other forums where non-attorneys will answer, I've been blamed for not being more careful when I do transactions. Or I've been told that my crypto is "lost forever." Please understand that while I appreciate your intent to help, what I'm posting here is a legal question regarding the somewhat arcane (but valid) principle of unjust enrichment.
Also, I'm aware that US-based Crypto Exchanges are not (yet) regulated by the CFTC or SEC.
Thanks so much!
