Since the creation of Bitcoin in 2009, cryptocurrency and financial technology (fintech) have revolutionized the financial landscape worldwide. While the decentralized nature of crypto offers many benefits to consumers and businesses alike, it can also leave users vulnerable to fraud. Furthermore, the inconsistent regulation of fintech in Canada and internationally can make it challenging to track and recover stolen assets.
Milosevic & Associates has extensive experience with asset recovery, investment loss, civil fraud, and injunctive relief, enabling us to develop creative, effective strategies for tracking stolen money and assets. When possible, we use a combination of these methods to trace and recover funds lost through cryptocurrency fraud.
DISCLAIMER: It is only possible to recover money lost through crypto fraud in certain cases.
The most important question for those who have suffered a loss through a crypto fraud is: can I get my money back?
Unfortunately, we cannot help in many cases, particularly those where funds have been routed by the fraudster through a foreign jurisdiction. Common countries used to funnel money stolen through crypto scams include China and Malaysia.
However, if in the course of the scam you sent funds to a Canadian or U.S. bank account and/or you know the identity of the fraudster, please contact us as soon as possible. In these cases, there is a greater likelihood of successfully tracing and recovering some of the stolen funds through swift legal action, but early intervention is critical.
Types of Crypto Scams in Ontario
As with most types of fraud, cryptocurrency scams are constantly evolving. However, many schemes fall within consistent patterns and use similar tactics to trick investors.
Some examples of crypto scams commonly seen in Ontario and across Canada include (but are not limited to) the following situations:
- Individuals receiving unsolicited advice (often over social media or chat apps) to open accounts or transfer assets to seemingly legitimate crypto platforms that, in reality, are fake “mirror sites” of real platforms;
- “Romance scams,” where victims are encouraged to transfer cryptocurrency or other funds to companies owned by an online romantic partner; and
- Investment schemes, where the scammer never uses the victim’s money to purchase cryptocurrency but provides fake evidence of a crypto investment portfolio.
Crypto Fraud Remedies in Canada: Money Tracing, Injunctions & Norwich Orders
Although crypto fraud is complex and highly case-specific, certain legal remedies have become vital to recovering stolen assets. These include tracing stolen funds or property and obtaining various injunctive orders through the courts.
Money Tracing
Tracing orders offer a way for a victim of fraud to “follow the money” through a fraudster’s accounts and investments to identify which assets are recoverable (i.e. should be returned to the defrauded person). Tracing can be highly complex as the stolen funds become intermingled with other property or assets, particularly as money and cryptocurrency can be easily moved all over the globe.
Mareva Injunctions (“Freezing Orders”)
One way to reduce the damage caused by a crypto scam and recover as much money as possible is to obtain a Mareva injunction. Also called “freezing orders”, these injunctions freeze the defendant’s assets and may require them to disclose where various assets are located. Mareva injunctions are most effective in situations where the person committing the fraud has moved money through traceable bank accounts.
Given the risk of losing access to the assets if action is not taken quickly, hearings for freezing orders are often granted on an emergency basis and without notice to the other party.
Anton Piller Orders
Like Mareva injunctions, Anton Piller orders are an effective way of preserving evidence in cases where it is at risk of being concealed or destroyed by the fraudster. When granted, an Anton Piller order empowers the fraud victim to seize relevant evidence, including equipment containing that evidence, such as computers, network servers, and records.
Norwich Orders
Norwich orders can be invaluable in cases where the defrauded individual can only obtain critical information to support their case from a third party. For example, in cases involving cryptocurrency fraud, a bank or other financial institution may hold the records needed to show the extent of the fraud and the entities involved. In other cases, a Norwich order may be required to find the identity of a person who used an internet-based email/messaging service or web domain account to set up a fake website.
A Norwich order allows the plaintiff to obtain this otherwise confidential information from an innocent third party (such as the email provider or bank), even before a lawsuit has been filed. As Norwich orders are a severe remedy and involve privacy considerations, they require a lawyer who is experienced in obtaining such remedies through the courts.
Quick, Bold Legal Strategies for Asset Recovery
After a person has lost money through crypto fraud, there is a limited time window for recovering the stolen assets. The aspects of cryptocurrency that make it so appealing to investors – its virtual nature, limited regulation, and decentralization – make it very difficult to trace. Any chances of recovery require fast, decisive action by a professional with knowledge of the legal tools available to stop further loss and track the stolen funds.
As mentioned above, there are many types of crypto fraud cases where we cannot assist, such as those where stolen funds have been routed through a foreign jurisdiction. However, whenever possible, we create inventive and aggressive legal solutions by using a combination of injunctive orders and money-tracing methods to prevent further loss, identify perpetrators, and recover as much money as possible.
Contact Milosevic & Associates in Toronto for Assistance With Cryptocurrency & Fintech Fraud
The highly skilled fraud lawyers at Milosevic & Associates understand the critical role that knowledge plays in representing clients affected by cryptocurrency scams. Our team keeps current on all fintech developments, including fraudulent investment schemes and the ever-changing regulatory landscape pertaining to virtual assets and cryptocurrency. We remain dedicated to providing responsive, accessible services to clients who have fallen victim to unscrupulous players in this dynamic and volatile financial sphere.
Milosevic & Associates is a leading litigation law firm based in Toronto. We provide comprehensive representation in a variety of areas, including complex corporate commercial disputes, investment loss, professional liability, and civil fraud. To schedule a confidential consultation with a skilled lawyer today, please contact us online or by phone at 416-916-1387.
