You can totally make a 1 digit typo while making a bank transfer that results in all the money being lost.
Perhaps you’ll recover it after years of litigation, but that’s really not guaranteed.
https://www.theguardian.com/money/2019/dec/07/i-lost-my-1930...
E: downvoted by upset bankers? :)
[1] https://www.betaalvereniging.nl/betaalproducten-en-diensten/...
And besides, big banks still have to deal with checksum-passing iban typos on a daily basis. IBANs only have two check digits.
Citation needed.
This is overly simplified so not entirely accurate, but if 100 customers typo their destination IBAN the modulo 97 checksum will probably let 3 of them through.
Actually the checksum was designed especially to deal with typos. As such, dealing with typo errors is usually not an issue at all.
What they do have to deal with is maliciously created IBANs though. However, if the account an IBAN should point at doesn't exist then the transaction usually just bounces.
That's the thing - they can deal with it. There are fallbacks.
In crypto, your money is just instantly destroyed.
They’ll ask the other bank if they’d like to return the money, and that bank will maybe ask the recipient if they’d like to return the money.
The recipient doesn’t want to return the money? You’re SOL. You can go to court, but they can trivially evade civil action by transferring the money overseas.
You can certainly pursue the matter in civil courts, but law enforcement does not like to touch this kind of stuff at all. If the recipient transfers the money overseas, you will most likely never be able to recover it.
As a result, if I received a large amount of money that I coulnd't explain, I would contact the sender or the bank first. I can't just spend it immeditaly and claim that I had no idea.
You can go to court and get a judgement against someone with no assets to collect. In the end you’ll just have lost even more money.
In the crypto case of this thread, the OP made a mistake and there's no process to fix it. 100K's lost. There's no avenue for recovery.
In the banking case of your link, the man made a mistake and was able to correct it, despite the bank working against him. 100K's lost and recovered.
In the case of the bank, it sure wasn't perfect and definitely should be better. But ultimately, the bank not only paid to recover the money, but the banking system (according to the article) is at least promising a fix for the underlying issue that a simple mistake in writing digits can lead to missending funds.
Also: crypto is touts its trustless nature as a positive. But note that trust is the lever Mr. Teich used to get Barclays to pay the cost of recovering the funds. Barclays only paid after their reputation was threatened, and of course, trust is based on reputation.
Of course you’re more likely to succeed when it’s real money and the other party has to worry about getting sued.
But even in the case of a bank transfer, the other party can abscond with your money and it’ll be extremely hard to recover since law enforcement probably won’t help you and (especially international) litigation costs can quickly render such an endeavor far too expensive.
[0] https://www.psr.org.uk/publications/consultations/cp19-4-con...
Difference being that it isn't "lost" -- not in the sense of vanished from the face of the Earth, gone, ceased to exist. It's only lost to the sender, but it still exists; someone still has it. Sure, the wrong person or entity, but still: It's not gone from existence. Only CryptoCrap does that.
To everyone: If you wrongly send money to a mistyped IBAN it is gone.
Plus banks in Europe have a transfer reversal grave period so you just call them and they'll most likely be able to undo the transaction.
> The IBAN check digit consists of two digits in positions 3 and 4 of the IBAN. It is calculated using the MOD97 algorithm and provides the primary integrity check for the IBAN standard.
Very unlikely, the checksum would prevent that.
And most banks (even though I’m unsure it is mandatory) will check the recipient, if totally mismatched a warning will be raised.
But if you send money to the wrong iban+recipient, the money is gone.
It is very unlikely that law enforcement would help you in a situation like this, especially internationally.
You clearly have no idea how an IBAN works. It has a checksum exactly to avoid mistyping.
And even if you send the money to an valid, but wrong, IBAN then one of two things happens:
* The account doesn't exist -> transaction bounces * The account does exist -> ask for money back, worst case go to court to recover it
But the money is not gone. There are no black holes just swallowing everything up.