A Victoria woman who lost over $670,000 to an online cryptocurrency scam has lost her lawsuit against NDAX Canada, a crypto trading platform that she used for the transfers.
In a decision released on October 20th, BC Supreme Court Justice LeBlanc ruled that while the woman’s losses were unfortunate, the Calgary-based company did everything it could to protect her, repeatedly warning her that she was likely being scammed before she insisted they process her withdrawals.
According to the judgment, Yan Li Xu met someone online who convinced her to send small investments of $500 and $1,000, which were quickly returned with hefty profits.
The easy early wins built her trust.
Soon after, she was persuaded to invest far more on the promise of daily returns of up to 1%. Xu went so far as to remortgage her home and borrow money from a friend, funnelling a total of $671,000 into her NDAX account between April and May 2023 to purchase Ethereum, a popular cryptocurrency.
When Xu tried to transfer her crypto to an external wallet, NDAX’s system flagged the transaction as suspicious.
Before processing the withdrawal, NDAX issued multiple warnings, including pop-up risk notices and a personal phone call from a company employee who told her outright that she was likely being scammed.
Xu, an accountant who told NDAX staff she’d been trading for 20 years, insisted she knew what she was doing — even threatening legal action if the company didn’t send the money.
After confirming her intentions a second time with NDAX’s compliance officer, the company processed the transaction. Xu then went on to send two more large transfers to the same wallet.
All of the funds were lost to the fraudster.
Justice LeBlanc said NDAX “could not have been clearer” in its warnings and was under no legal duty to stop Xu’s transactions once she insisted on proceeding.
“Other than refusing to process the transaction — something the defendant was not entitled to do — there is nothing further NDAX could have been expected to do,” LeBlanc wrote.
Xu’s claim was dismissed, and the court ordered her to pay NDAX’s legal costs.
“If an investment proposal sounds too good to be true, it probably is,” the judge noted at the very start of the decision.
