Scammers Impersonate Canadian Tax Authority, Threaten to Deport Recent Immigrant, Use Bitcoin ATM to Steal $62 500

Telephone scammers pretending to be representatives from the Canada Revenue Agency (CRA) recently used threats of deportation and a bitcoin ATM to defraud a recent immigrant in Charlottetown PEI out of $65 000, CBC reports.

Now a Charlottetown court has ruled that the Bitcoin ATM operator that processed the woman’s money and transmitted the sum in Bitcoin to the scammers, Instacoin ATM Canada Inc., cannot be held liable for the lost funds.

Chief Provincial Court Judge Nancy Orr said users need to understand the nature of bitcoin, a system where transactions can only be reversed with the consent of the recipient.

“Both sides involved in this case are completely sympathetic to the woman…It’s up to the bitcoin purchaser to know what they’re doing.”

According to the CBC, the woman told the court she was contacted over the phone by a man pretending to be from the CRA, who told her she would be immediately arrested and deported if she did not send a large sum.

She said she also received a follow-up call from someone pretending to be her accountant who recommended that she pay the sum.

The scammers provided the woman with a bitcoin address (a long string of characters and numbers) and then directed her to send the money using a bitcoin ATM.

The woman then used an Instacoin ATM to transmit the funds, and some time later, contacted the Charlottetown police, who proceeded to seize $62 500 from an Instacoin ATM and hold it.

Instacoin’s lawyer, Michael Drake, argued in court that Instacoin provided a neutral financial service to the woman and was not a party to the crime.

The CBC writes:

“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…had not consented to the transaction.”

The judge agreed with Instacoin, ruling:

“It’s most unfortunate that she was victim of such a sophisticated fraud, but Instacoin did not put her under duress.”

Besides being irreversible, Bitcoins can also be transacted pseudonomously and can be expensive to forensically track.

 

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