Canadian Court Clears NDAX Exchange in $671K Scam Case After User Ignored Repeated Warnings

The British Columbia Supreme Court has ruled in favor of Calgary-based cryptocurrency exchange NDAX Canada, absolving it of liability after a customer lost C$671,000 (approximately US$480,000) to a fraudulent online investment scheme. Justice Lindsay LeBlanc delivered the judgment on October 24, 2025, dismissing a lawsuit filed by Victoria resident Yan Li Xu, who transferred digital assets to an external wallet linked to the scam.

NDAX, registered with Canada's Financial Transactions and Reports Analysis Centre (FINTRAC) as a money service business, issued four separate warnings to Xu before the transaction was completed. These included a written Crypto Risk Disclosure acknowledging the irreversibility of crypto transactions, a follow-up reminder, and two personal phone calls from employees explicitly advising her not to proceed due to suspicious activity. During the calls, recorded as court evidence, Xu insisted she was experienced in financial matters and understood the risks, yet proceeded with the transfer.

Justice LeBlanc emphasized that NDAX "identified suspicious financial activity and cautioned the plaintiff not to proceed, but the plaintiff did not heed the warning." The court found no breach of duty, concluding that NDAX had taken all reasonable precautions, including escalating the matter and providing additional guidance documents. This ruling underscores that exchanges can meet their duty of care through transparent warnings, even if users neglect them.

The decision aligns with Canada's tightening regulatory oversight, as evidenced by FINTRAC's recent record C$176.9 million fine against another crypto firm, highlighting a balanced approach between enforcement and user responsibility in the evolving crypto landscape.