BC woman sues crypto platform after losing $670,000 in scam

A BC woman who ignored warnings that she was likely being scammed has failed in her attempt to sue a cryptocurrency trading platform after losing $670,000.

According to an Oct. 20 BC Supreme Court decision, Yan Li Xu received four warnings from cryptocurrency trading platform NDAX Canada, including a phone call telling her she was likely “being scammed,” but she pressed on.

In 2023, she transferred $671,000 into a cryptocurrency wallet controlled by someone she didn’t know, and the money then disappeared.

Representing herself in court, she then tried to sue, saying the company had breached its duty of care.

Justice LeBlanc didn’t agree.

“(NDAX Canada) identified suspicious financial activity and cautioned (Xu) not to proceed. Unfortunately, (she) did not heed the warning,” the Justice said in the decision.

The decision said Xu was befriended by someone she cannot name who convinced her to send money for investments. She initially sent $500 or $1,000 and received generous returns.

Once trust was established, she was asked to purchase the cryptocurrency Ethereum on the promise of a 1% return per day.

She remortgaged her house and borrowed money from a friend, and opened an account with NDAX Canada.

When she went to transfer the funds the cryptocurrency exchange presented her with a disclosure statement.

“Do not proceed with this withdrawal if anyone has accessed your device remotely… Only send cryptocurrency to trusted wallets… Beware of common cryptocurrency scams, such as high-return investments,” the message said along with numerous other warnings.

She clicked that she’d read and understood the message.

A second message then popped up.

“I understand crypto asset withdrawals are final and irreversible,” it read in part.

Xu agreed to it.

The company then called her and told her she was likely being scammed and she shouldn’t proceed.

“I find that (NDAX Canada’s) warnings to the (Xu) could not have been clearer,” the Justice said.

After the call, she sent NDAX Canada numerous emails demanding that they proceed with the withdrawal without delay.

“(Her) tone escalated to where she was threatening legal action against (them) if they did not proceed,” the decision read.

The company then called her again and told her she might be the target of cryptocurrency fraud, and once the money was transferred, it was irreversible.

She told them she knew what she was doing and that no one controlled her and she’d been trading stocks for over 20 years and understood the risks.

“Despite the warnings, the (Xu) transferred all of the purchased Ethereum to a cryptocurrency wallet controlled by a third party, becoming the victim of a cryptocurrency scam, resulting in the loss of the funds,” the Justice said.

During the three-day trial, recordings of the conversations Xu had with the company were played.

The Justice found the company had clearly said she was at risk.

“(Xu) ignored these clear and repeated warnings and insisted that the (company) proceed,” the Justice said.

The Justice said it was regrettable, but there was nothing more the company could be expected to do and dismissed her case.