Judge rules bitcoin company not responsible for woman's loss in scam

A judge has ruled $62,500 in cash, seized by Charlottetown police inside a bitcoinmachine, belongs to the company that owns the machine.

The woman who put it there was the victim of a phone scam.

"It's really hard. I need that money back," said the woman, fighting back tears in a telephone call with CBCNews, after the decision Friday in Charlottetown Provincial Court. "I want other people toknow what happened to me, so it doesn't happen to them."

The court case centred on who legallyowns the money she deposited into a bitcoin machine.

Charlottetown lawyer Michael Drake, representing the machine's owner,InstacoinATM Canada Inc., argued that the company merely provideda financial service to the woman, by converting cash to bitcoin currency, and sending it to thecomputer address she provided.

Inthis case,the woman provided the computer address of an unknown telephone fraudster.

"Both sides involved in this case arecompletely sympathetic to the woman," said Chief Provincial Court Judge Nancy Orr, as she handed down her decision. "It's up to the bitcoin purchaser to know what they're doing."

At a court hearing in September, the woman testified the man who phoned her claimed to work for the Canada Revenue Agency. As a recent immigrant, she testified she found it believable that she faced immediate arrest and deportation if she did not send him large amounts of cash. She testified the numbers displayed on her phone looked legitimate. Thefraudsterseven called her at one point, shetestified, claiming to be her accounting firm, advising her to pay the money.

The woman's lawyer, Jonathan Coady, had argued she was acting "under duress" when she put the money in the machine, and for that reason, she had not consented to the transaction.

"It's most unfortunate that she was victim of such a sophisticated fraud, " said the judge Friday."But Instacoindid not put her under duress."

Digital currency, such as bitcoin, is used in online transactions that do not use traditionalbanks.

During her ruling, the judge reviewed Government of Canada informationondigital currency. Transactions areanonymous, she noted, making that one of their attractions, but also a drawbackin cases of fraud. Digital currency transactions are instant and non-reversible.

The woman who lost her money told CBCNews she continues to receivecalls from telephone scammers.

"Now I hang up," she said.

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