The legal profession has witnessed a pivotal moment in crypto-asset law with the decision from the Supreme Court of British Columbia in Xu v. NDAX Canada, 2025 BCSC 2048. According to a publication by Canadian Lawyer Magazine, the court absolved NDAX of liability for the losses of a trader who transferred crypto to a scam inducement. Canadian Lawyer

In the article, Daniel Walker—Managing Partner of Bobila Walker Law in Toronto—offered his insight:

“This BC case clarifies that crypto platforms are not de facto guardians of investor decisions,” Walker states. “The Court recognized that NDAX provided multiple, escalating fraud warnings, including direct verbal cautions, and that once a user insists on proceeding, the responsibility for loss shifts squarely to the individual.” Canadian Lawyer

He further commented:

“Xu v NDAX is significant because it adapts traditional banking law to the realities of crypto trading. Exchanges must exercise reasonable care and document their warnings, but they aren’t required to override lawful customer instructions. It strikes a pragmatic balance: protect users through transparency and education, but preserve autonomy in financial transactions.” Canadian Lawyer

Why this matters:

  • The ruling reinforces that trading platforms may not automatically bear responsibility for fraud losses when they take reasonable steps to warn users.

  • It emphasizes that user autonomy remains central even in high-risk domains like crypto assets—once clear warnings are given and disregarded, liability may shift to the user.

  • Walker’s commentary helps frame the decision as an important development for both regulators and advisors navigating the evolving crypto-asset space.

Takeaways for practitioners and clients:

  1. Platforms engaging in crypto (and other high-risk sectors) should ensure robust documentation of risk disclosures, warnings, and user confirmations.

  2. Legal advisors should counsel clients that even when the service provider has done its diligence, user behaviour plays a crucial role in loss allocation.

  3. Investors need to heed warnings and understand that “getting in early” or “a too-good-to-be-true” pitch may still expose them to substantial personal risk—even if transfers appear legitimate.

SOURCE: https://www.canadianlawyermag.com/practice-areas/corporate-commercial/bc-supreme-court-absolves-ndax-of-liability-in-crypto-scam-suit/393290