Supreme Court to test legal system’s limits for Canadian victims of cryptocurrency fraud

A Supreme Court of Canada case involving the Binance cryptocurrency exchange could have significant implications for Canadian fraud victims whose virtual assets are stashed in accounts at foreign exchanges, according to legal experts.

The case concerns three Nigerian citizens allegedly defrauding a Canadian out of about $65,000 worth of bitcoin. Investigators traced the cryptocurrency to three accounts held by Nest Services Ltd., which has its head office in the Seychelles. Nest is one of several corporate entities that make up the Binance platform.

In 2025, the Ontario Superior Court of Justice granted some of the orders sought by the province’s Attorney-General to freeze and preserve the crypto assets.

Last week, Canada’s top court agreed to hear an appeal of the 2025 decision brought by the Binance entities, which had opposed the Attorney-General’s original application on jurisdictional grounds. A date for the hearing has not been set.

The case demonstrates the challenges that the cross-border nature of cryptocurrency fraud poses for law enforcement.

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Fraudsters are siphoning millions of dollars out of the Canadian economy each year. Fraud victims reported $351-million in losses to the Canadian Anti-Fraud Centre in the first six months of this year, and that figure likely represents just the tip of the iceberg. The centre estimates that only 5 per cent to 10 per cent of frauds are reported.

Law enforcement agencies looking to seize stolen cryptocurrency assets often find themselves dealing with exchanges headquartered outside the country, where Canadian court orders may lack jurisdiction.

Jeffrey Simser, a lawyer and asset-forfeiture expert, said the Supreme Court’s ruling in the Binance case will be “immensely important.”

“We live in a world defined by nation states and borders. This case will test whether a business operating in Canada can assert their corporate structure and location to evade their Canadian legal obligations,” said Mr. Simser, the former director of civil forfeiture at Ontario’s Ministry of the Attorney-General.

Tanya Walker, a Toronto-based lawyer with experience in fraud cases, said the appeal “raises an important question about how far Canadian courts can reach to preserve cryptocurrency connected to an alleged fraud against someone in Canada.”

The Ontario court had ruled it had the jurisdiction to grant some of the orders sought by the Attorney-General because Nest Services had sufficient customers, holdings and transactions in Canada to be deemed as having a “virtual presence” in the country. Although it no longer wished to do business in Canada, Nest still had some 248,114 Canadian customers, with approximately $35,815,317 in their accounts.

Whether or not the Supreme Court upholds the Ontario court’s ruling will have significant implications for victims of crypto fraud, Ms. Walker said.

“The ability to preserve assets before they are moved can materially affect the prospects of eventual recovery, although preservation itself does not guarantee that the funds will be returned,” she said.