Saskatchewan Court of Appeal rules in favour of cryptocurrency exchange in $240K fraud case

An advertisement for the cryptocurrency, Bitcoin, is displayed on a building in Hong Kong on Nov. 18, 2021. (AP Photo/Kin Cheung, File)

A case which saw fraudsters make off with $240,000 has a new development – as Saskatchewan’s highest court has sided with the cryptocurrency exchange that was defrauded.

In a decision published late last month, Saskatchewan’s Court of Appeal ruled in favour of HoneyBadger Enterprises Ltd. – awarding the Vancouver, B.C. based cryptocurrency exchange $200,000.

A previous 2025 decision from Saskatchewan’s Court of King’s Bench saw the $240,000 at the heart of the matter be split up between HoneyBadger Enterprises, which received $140,000, and a retiree living in southwest Saskatchewan, who received the remaining $100,000.

• Saskatchewan court splits $240,000 between fraud victim, cryptocurrency exchange

In that decision, Justice Charlene Richmond found that both HoneyBadger and the man acted improperly and were each victims of the fraud.

Beginning in 2022, the man was repeatedly contacted by fraudsters and continued to lose sizeable investments.

This continued until mid 2023 when the man eventually granted the scammers, who were reportedly posing as the “FBI” at this point, remote access to his computer.

Following two transfers totalling $200,000 that the man claimed he was not aware of, he contacted his bank and the funds were seized – awaiting the outcome of the legal battle.

• Sask. man in court battle with crypto exchange lost over $240K to fraud

The 2025 ruling also found HoneyBadger did not abide by its own pre-authorized debit (PAD) agreement and did not issue the man a password or another means of authorizing each specific purchase.

Court of Appeal’s ruling

However, the Court of Appeal challenged this ruling, finding that the fact the victim directedly allowed a third party to defraud him – paired with a different interpretation of HoneyBadger’s responsibility under the PAD agreement – ultimately left the man solely responsible for the fraud.

“Since [the victim] had been previously defrauded three times and had then given the ‘FBI’ unsupervised and unfettered access to his computer and to his email account for the purpose of facilitating the Bitcoin purchases, there is, respectfully, no reason to hope that he might not have given the ‘FBI’ the ‘password or security code or other signature equivalent’ that was necessary to pay for those purchases – regardless of whether he or Honeybadger were contractually required to issue it," Justice Neal Caldwell wrote in the decision.

The court ultimately dismissed the victim’s cross-appeal, which argued that the cryptocurrency transfers were not legally valid and asked for a larger share of the seized funds.

The $40,000 granted to HoneyBadger following the lower court’s decision was not affected by the Court of Appeal ruling – meaning the crypto broker will receive the full $240,000 – unless the victim appeals the decision to the Supreme Court of Canada within 60 days.