Skip to Content Skip to Subnavigation

OBSI – Ombudsman for Banking Services and Investments

Consumer Portal LoginFirm Portal Login
Français
Increase Contrast
Fran�aisFR Main menu icon Open Menu
  • For Consumers
    • Can OBSI Help?
    • Consumer Bulletins
    • Consumer Portal
    • Consumer Resources
    • FAQs
    • Find Your Firm
    • How the Complaint Process Works
    • How We're Funded
    • Make a Complaint
    • Past Feedback and Input
    • Video Library
    • What to Expect for Consumers

    View our Make a Complaint page

    Make a Complaint

  • For Firms
    • Apply for Membership
    • Fee Payment Structure
    • Firm Bulletins
    • Firm Feedback and Input
    • Firm Helpdesk
    • Firm Portal
    • Firm Resources
    • Participating Firms
    • What to Expect for Firms

    Log in to OBSI Firm Portal

    Firm Login

  • How We Work
    • FAQs
    • Our Approaches
    • Our Service Standards
    • Outreach to Consumers and Firms
    • Reconsiderations and Complaints About OBSI
    • Responsibilities of Firms and Consumers
    • What to Expect From Our Process

    View our FAQs page

    FAQs

  • Case Data and Insights
    • Banking Case Summaries
    • Case Studies
    • Data Cube
    • Quarterly Case Data

    View our Case Studies page

    Case Studies

  • News and Publications
    • Annual Reports
    • Firm Refusals
    • News Releases
    • OBSI News
    • Presentations, Reports and Submissions
    • Print Materials
    • Public Consultations
    • Video Library

    View our OBSI News page

    OBSI News

  • About Us
    • About OBSI
    • Accessibility
    • Careers
    • Contact Us
    • Governance
    • How We're Regulated
    • Our History
    • Our Vision
    • Privacy
    • Staff
    • Terms of Reference

    View our Contact Us page

    Contact Us

I'd Like To... Open icon Close Icon
  • Make a complaint
  • Contact OBSI
  • Find my firm
  • Apply for membership
  • Know how the complaint process works
  • Learn more about OBSI's outreach to consumers and firms
  • Subscribe
  • Follow OBSI on Twitter
  • Follow OBSI on LinkedIn

bookshelf

Investor loses nearly $400,000 in cryptocurrency scam

Print Print link
Share Share icon
  • Open new window to share this page via Facebook Facebook
  • Open new window to share this page via LinkedIn LinkedIn
  • Open new window to share this page via Twitter Twitter
  • Email this page Email
Increase link Increase text size
Descrease link Decrease text size
Back to Search

Mr. F was a healthcare professional and wanted to invest his savings. He was contacted online by someone who claimed to represent online investment company Firm X. The representative said the firm offered investing opportunities with high returns and advisory services to help investors. The representative encouraged Mr. F to use Firm X’s trading platform to invest in cryptocurrency. To open the account, he was told that he would need to invest using bitcoin.

Shortly afterwards, Mr. F opened an online account with a legitimate registered cryptocurrency dealer. Over several weeks, he used its services to convert money from his bank account into the equivalent of bitcoin. When the bitcoin was delivered to Mr. F, he then e-transferred the bitcoin from his crypto account to Firm X’s external e-wallet. Each time he initiated a transfer, the crypto dealer issued automated messages including warnings about common cryptocurrency scams and red flags. Mr. F always clicked on these messages to confirm that he understood and wanted to proceed with the transaction.

While Mr. F continued to rely on the advice of Firm X’s representative, he had grown increasingly concerned about delays with providing him proof of settlement for his investments. A few weeks after his request for the documentation, Firm X’s trading platform and website went offline. Mr. F suspected that he had been scammed and requested that the crypto dealer reverse the last e-transfer of bitcoin he had sent to Firm X’s e-wallet. The crypto dealer told Mr. F that due to the nature of blockchain technology any funds sent to an external e-wallet could not be recovered.

Upset, Mr. F complained that he was a victim of fraud and had lost nearly $400,000 of his savings. He requested that the crypto dealer refund all the money he had transferred since he had been scammed while using its service. The crypto dealer said it was not responsible for Mr. F’s losses because Mr. F had authorized his transactions and indicated that he understood its automated prompts warning him that crypto withdrawals are irreversible, and he should not take advice from or send money to somebody he met online.

Furthermore, the crypto dealer could find no evidence that Mr. F’s account or password had been compromised or unauthorized transactions had taken place. Unsatisfied with the crypto dealer’s response, Mr. F brought his complaint to OBSI.

Complaint not upheld

During our investigation, we reviewed the crypto dealer’s findings about Mr. F’s case and interviewed Mr. F. and a representative of the dealer. We confirmed that Mr. F knowingly and willingly authorized all the transactions in his crypto account and that only Mr. F had access to his account password.

We also found that the crypto dealer had gone beyond its regulatory obligations by issuing warnings to Mr. F about the risks of transferring cryptocurrency to a person he met online. There were no indications of fraud that the crypto dealer should have recognized. While Mr. F was a victim of a serious crime, after completing our investigation we found that his loss had occurred when he authorized the transfer of bitcoin to a fraudulent investment firm and there was no basis on which to recommend that the crypto firm be held responsible.

Subscribe to this Page
Subscribe
  • Can OBSI Help?
  • Consumer Bulletins
  • Consumer Portal
  • Consumer Resources
  • FAQs
  • Find Your Firm
  • How the Complaint Process Works
  • How We're Funded
  • Make a Complaint
  • Past Feedback and Input
  • Video Library
  • What to Expect for Consumers
  • For Consumers
  • For Firms
  • How We Work
  • Case Data and Insights
  • News and Publications
  • About Us
  • Other Links
  • Can OBSI Help?
  • Consumer Bulletins
  • Consumer Portal
  • Consumer Resources
  • FAQs
  • Find Your Firm
  • View All...
  • Apply for Membership
  • Fee Payment Structure
  • Firm Bulletins
  • Firm Feedback and Input
  • Firm Helpdesk
  • Firm Portal
  • View All...
  • FAQs
  • Our Approaches
  • Our Service Standards
  • Outreach to Consumers and Firms
  • Reconsiderations and Complaints About OBSI
  • Responsibilities of Firms and Consumers
  • View All...
  • Banking Case Summaries
  • Case Studies
  • Data Cube
  • Quarterly Case Data
  • Annual Reports
  • Firm Refusals
  • News Releases
  • OBSI News
  • Presentations, Reports and Submissions
  • Print Materials
  • View All...
  • About OBSI
  • Accessibility
  • Careers
  • Contact Us
  • Governance
  • How We're Regulated
  • View All...
  • Privacy
  • Sitemap
  • Accessibility
  • Subscribe to Our News
  • Contact Us
  • Website Feedback
  • View All...

Ombudsman for Banking Services and Investments logo

Toll-Free Telephone: 1 (888) 451-4519
Greater Toronto Area: (416) 287-2877
TTY Telephone: 1 (844) 358-3442

Toll-Free Fax: 1 (888) 422-2865
Greater Toronto Area Fax: (416) 225-4722

Design by eSolutionsGroup

© 2017 Ombudsman for Banking Services and Investments (OBSI), 20 Queen Street West, Suite 2400, P.O. Box 8, Toronto ON M5H 3R3

High Contrast Mode is on

Browser Compatibility Notification

It appears you are trying to access this site using an outdated browser. As a result, parts of the site may not function properly for you. We recommend updating your browser to its most recent version at your earliest convenience.