Canadian Exchange NDAX Cleared in $671K Crypto Fraud Case later than 4 Ignored Warnings
A has ruled in favor of cryptocurrency platform NDAX Canada in a high-profile case involving a customer’s C$671,000 (about US$490K) loss to an online scam. The ruling found that NDAX issued four written fraud alerts and two phone warnings to the client before the transfer, and therefore, the platform could not be held liable for the loss.
The decision, handed down by the British Columbia Supreme Court, sets a significant precedent for crypto platforms and their legal obligations toward customers. Despite the client’s claims, the court concluded the plaintiff acknowledged receipt of the warnings and remained aware of the risks.
NDAX platform Cleared: What the Judgement Found
The complainant, a resident of B.C., transferred funds from her NDAX account to a linked to a phishing investment scheme. That scheme promised high returns on crypto-based “investments” and targeted the client through a sophisticated campaign of fake offers. However, NDAX had sent four emails warning of suspicious activity, two of which were followed up with direct telephone calls cautioning against the transaction.
At trial, the court evaluated whether NDAX owed a broader duty of care beyond its standard terms of service. The key findings stated that NDAX was registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and operated under (AML) and fraud frameworks. The platform had already flagged the unusual transaction and elevated it internally for review. And despite repeated risk disclosures and outreach to the client, they proceeded with the withdrawal.
Justice Lindsay LeBlanc ultimately ruled NDAX took “reasonable steps” and could not be held responsible for the subsequent loss. The case stressed the importance of user responsibility in transactions once a proper warning is given.
NDAX Ruling Shows Crypto Security is Everyone’s Job
According to the court ruling, “The loss was self-inflicted,” placing responsibility on the victim rather than the platform. The ruling is expected to resonate across Canada’s crypto industry, particularly as and platforms refine their approaches to liability, compliance, and consumer protection.
The judgment draws a clear boundary around platform liability, establishing that when platforms issue explicit warnings and flag suspicious transactions, their legal obligations may be deemed satisfied, effectively shifting greater responsibility to users themselves.
It also reinforces industry operational best practices, highlighting that compliance actions, such as issuing alerts, pausing flagged withdrawals, and conducting proactive outreach, serve as evidence of excellent faith in the event of disputes. Beyond its immediate impact, the case underscores the ongoing threat of phishing and fraud campaigns targeting retail crypto investors. It emphasizes the need for sustained user education as a frontline defense against evolving .
The Canadian court’s decision marks a pivotal moment in how platform liability is evaluated in the crypto ecosystem. By affirming that a platform’s duty can be met through proactive warnings, the ruling reinforces the dual responsibility of platforms and users in fraud prevention.
