TL;DR
- A British Columbia court ruled that NDAX Canada was not liable for a customer’s C$671,000 loss after she ignored multiple scam warnings.
- The exchange had issued four separate fraud alerts, including a direct phone call confirming the risk.
- This ruling highlights that cryptocurrency platforms can fulfill their duty of care even if users fail to heed clear fraud warnings, reinforcing responsible trading practices in Canada.
A Canadian cryptocurrency exchange has been cleared of liability after a customer lost more than C$671,000 to an online scam, despite receiving repeated warnings. The British Columbia Supreme Court ruled in favor of Calgary-based NDAX Canada, stating that the platform acted responsibly and had taken every reasonable measure to prevent the loss.
Court Confirms Exchange Took All Reasonable Precautions
The case involved Victoria resident Yan Li Xu, who transferred her digital assets to an external wallet linked to a fraudulent investment opportunity. NDAX, registered with Canada’s FINTRAC as a money service business, issued four separate warnings before the transfer was completed. These included written risk disclosures, a reminder that crypto transactions are irreversible, and two personal phone calls from employees explicitly advising Xu not to proceed. The platform also provided additional guidance documents explaining the risks of online scams, which were included in the court evidence.
Justice Lindsay LeBlanc emphasized that NDAX identified
“suspicious financial activity and cautioned the plaintiff not to proceed, but the plaintiff did not heed the warning.”
Xu acknowledged receiving and understanding each alert and insisted she was experienced in financial matters. Court documents show she confirmed her knowledge of crypto risks and still chose to move forward.
Ruling Highlights Growing Regulatory Landscape
The judgment concludes that NDAX met and exceeded its obligations. The court found no breach of duty and affirmed that the platform did not cause the loss. The case underscores that exchanges can act responsibly without being held liable for user negligence when proper warnings are issued.
This decision comes as Canada strengthens oversight of cryptocurrency platforms. Just this week, FINTRAC issued a record C$176.9 million fine against another Vancouver-based crypto firm, signaling a stricter regulatory approach in line with global anti-money laundering and counter-terrorist financing standards. The ruling demonstrates a balance between enforcing compliance and recognizing user responsibility, which could shape the future of crypto trading safety in Canada.
NDAX Canada has not commented publicly on the ruling, but the decision is seen by many industry observers as a win for exchanges operating with transparent compliance and robust user protection measures.
