Canadian Court Clears Crypto Exchange After Warned Investor Loses $480K in Scam

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A British Columbia Supreme Court judge has ruled that the Canadian exchange NDAX Canada is not liable for a customer’s loss of C$671,000 (US$480,000) after she fell victim to a cryptocurrency investment scam. The customer was given multiple warnings by NDAX that she was likely being defrauded.

The case involves Victoria, BC, resident Yan Li Xu, who opened an account with NDAX in April 2023 after being persuaded by an unnamed online contact to invest in a scheme promising up to 1% daily returns. Between April 11 and May 17, 2023, she deposited the funds she had raised by remortgaging her home and borrowing from a friend, before converting them into Ethereum.

NDAX escalated a transaction for further review on April 18 and called Xu for details about the attempted transfer, warning that she was likely “being scammed.” The transfer to an external wallet was flagged, and Xu received four escalating warnings. 

These warnings included calls from NDAX employees, written risk disclosures, and a secondary confirmation prompt. While a compliance officer directly warned Xu against the transactions, court records report Xu as being insistent that the Ethereum was transferred out of her account.

Justice LeBlanc of the Supreme Court in Victoria said that NDAX’s “warnings to the plaintiff could not have been clearer,” and ruled the exchange had fulfilled its duty of care. The victim’s funds have not been recovered.