About $90.1 million has mistakenly gone outUsers of the popular DeFi staking protocol Compound were affected by an upgrade that went horribly wrong. Now, the founder is making a plea — and issuing a few threats — to incentivize the voluntary return of the platform’s crypto tokens.

Robert Leshner (founder of Compound Labs) said, “If you have received an incorrectly sized COMP due to the Compound protocol error, please return it.” tweeted late Thursday

Keep 10% for a white-hat. The tweet said that if it isn’t, then income will be filed with the IRS. Most of you are also doxxed.”

Initial plunge in price for Compound’s native token COMP of nearly 13% per day due to news about the bug. However, it has since rebounded. since gained back ground

We will not know if reward recipients decide to give back millions of dollars, but history suggests it’s possible.

“Alchemix [another decentralized finance, or DeFi, protocol]”Had a similar event a few month back in which they gave out more rewards that intended,” Mudit Gusta, blockchain security researcher at CNBC. “Almost all those who were awarded extra rewards received the refunds.”

The Alchemix exchange has lost only $4.8million.

Gupta, however, remains optimistic.

He said, “This gives me hope that most people will reimburse COMP tokens as well but it’s impossible to be certain.”

Compound is one example of DeFi protocol. recreate traditional financial systems such as banks and exchanges using blockchains enriched with self-executing smart contracts.

Compound launched what had been an easy upgrade on Wednesday. However, soon after its implementation, it became apparent that something was seriously wrong.

“The Comptroller’s new contract has a bug that causes some people to get far too many COMP.” explained Leshner in a tweet

He said that there aren’t any community tools or admin controls to disallow COMP distribution. Any changes to the protocol must go through a seven-day governance process before they can be put into production. This indicates that no fixes could occur for more than seven days.

Gupta, a core developer at decentralized crypto exchange SushiSwap, said in a tweetIt is possible that all of the episodes could have been caused by a code bug.

Although Compound stated that there were no borrowed or supplied funds at risk, it did not soften the blow.

Protocol users en masse began reporting massive windfalls. Leshner’s Tweet about the bug quickly attracted $29 Million worth of COMP tokens. were claimed in one transaction Other claimedThey received approximately $20.8 million in COMP tokens, which is 70 million.

There are many COMP token millionaires.

Users who are used to lending crypto at a fixed interest rate to borrowers were used to the large and inflated rewards. This was a welcome change of pace.

Leshner clarified, however that there’s a limit to the amount of carnage. The Compound chief tweeted thatComptroller contracts address contain “a restricted quantity of COMP.”

Leshner stated that the impact of this decision is limited to 280,000 Comp tokens. Gupta told CNBC that this entire pool of tokens — worth about $90.1 million, as of the time of publication — has already been handed out.

Let’s pretend that the account holder was a fictional person. accidentally gifted $29 million in COMP tokens in error. The user can return the money and keep the tip worth $2.9 million. However, they could also keep their misguided reward or risk being “doxxed”.

To doxx someone is to make public information that is private about them, and in cryptospeak, it is a crime.

“CNBC’s Mati Greenspan said that doxxing its customers was the worst thing a cryptocurrency company can do for PR purposes.

This seems unlikely, and Leshner wouldn’t pursue it. He quickly returned his tweet from Thursday evening, saying it was “a boneheaded approach/tweet”.

The threat of the IRS reporting a mistaken reward is also present.

“Section 61 of the IRS codeIt is important to define income broadly. Income can be defined broadly if you receive a substantial amount from an error, and choose to keep it,” said Shehan Chandrasekera a CPA, head of tax strategy and CPA at CoinTracker.io.

If extra tokens were incorrectly granted, users could return them. Chandrasekera explains that although the recipient technically is responsible for paying income tax on the amount of the coins that were received, the person who returns the money does not have to file income taxes.

Chandrasekera makes it clear, however that they are not required to return any funds. Their reward would be reported to IRS. They will only have to pay income tax on it.

The $29 million Comp token winner will take home the largest amount in an arrangement where Uncle Sam pays them up, and Compound is paid back.

Greenspan argues that the bug’s outcome is not important. “The bigger issue is – can it happen again?” He said.

Compound is the world’s fifth-largest DeFi protocol with a total value locked of $9.65 billion, according to DeFi Llama, which provides ranking and metrics for DeFi protocols.

Greenspan stated that the protocol could easily absorb losses of up to $90 million. However, the bigger issue is if the public loses faith in the system’s ability function correctly.