Sask. Man Loses $240K Cryptocurrency Scam
A Saskatchewan resident who fell victim to a cryptocurrency scam, losing $240,000, has been denied a quick recovery of his funds by a judge.
The individual, a 66-year-old retiree from Cabri, Saskatchewan, had engaged with a company called Honeybadger Enterprises to invest in cryptocurrency, a form of digital currency. As part of the registration process, he signed a pre-authorized debit agreement, granting the company permission to withdraw money from his Innovation Credit Union account for cryptocurrency purchases. This information was detailed in a King’s Bench court decision published last month.
Shortly after registering, the retiree’s email account was compromised, and an imposter, posing as him, continued to buy cryptocurrency. HoneyBadger proceeded to transfer the cryptocurrency to virtual wallets, making it highly improbable that it would ever be recovered, as noted by Justice Charlene Richmond in her ruling.
Upon discovering the fraudulent activity, the retiree contacted his credit union, which managed to retrieve the $240,000 from HoneyBadger’s accounts. While the funds were returned to his account, it remained unclear who legally owned them.
HoneyBadger argued that it was entitled to the money because it had followed emailed instructions to transfer cryptocurrency, while the retiree contended that he should possess the funds because he neither initiated nor received the cryptocurrency.
Regrettably, the court document stated, “the cryptocurrency is unlikely to ever be recovered,” leaving the unresolved question of who should bear the loss resulting from this theft.
An initial order to preserve the funds for 30 days was granted in June and extended in July. Although HoneyBadger requested another extension, the retiree opposed it. Ultimately, the judge ruled in favor of HoneyBadger to keep the funds preserved.
“Although I am sympathetic that [he] finds himself embroiled in circumstances brought about by an unknown fraudster, I am nonetheless satisfied that HoneyBadger should have the preservation order as requested,” Richmond wrote in her decision on Sept. 19.
The preservation order will freeze the funds until the case is brought before the court again to decide who is liable for the loss, or until the two parties come to an agreement.
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