‘I just want my money back.’ Couple had $100K wire stuck for months after trying to buy Bitcoin

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Michelle Yi and her husband Min Jae Kim of Coquitlam, B.C., thought they’d found a relatively low-risk way to make money with Bitcoin.

Like many others, the Coquitlam, B.C., couple decided to put money into Bitcoin after the cryptocurrency surged to an all-time high of nearly $19,000 U.S. ($24,500 Canadian) at the end of last year. Yi, an accountant, had read about the extreme volatility of digital money, but the investment they had in mind seemed to have little to do with that. The plan was to buy Bitcoin in order to sell it in South Korea, where the digital money was trading at a premium of 40 per cent to 50 per cent compared to the North American market.

READ MORE: Bitcoin for Canadians: Where to buy it – and the taxes you’ll pay

It seemed like an easy and relatively low-risk way to make a hefty profit. So the couple sent a $100,000 wire transfer to Vancouver-based cryptocurrency exchange Quadriga CX on Jan. 9.

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That’s when their money seemingly vanished into thin air.

“I just want my money back,” Yi told Global News via telephone on March 16. Over two months had passed, and the couple still had no idea where the funds had gone.

The couple were eventually reunited with their money a few days later. After Global News got in touch with Quadriga about the issue, the company swiftly processed the wire transfer, waived a $2,000 processing fee and, upon Yi’s request, returned the funds to Kim’s bank account.

But Yi and Kim’s story illustrates another set of risks facing Canadians who invest in Bitcoin and other digital tokens — one that has little to do with gyrations of the crypto market, hackers, or criminals using virtual currencies to buy and sell contraband.

READ MORE: Bitcoin is crashing – and selling it is not easy

Global News spoke to several other sources who said transactions to and from Quadriga accounts took weeks or months to process. Some are still waiting to see their money reappear.

The issue seems to be only in part due to customer service problems at Quadriga, which is one of Canada’s two established cyrptocurrency exchanges, along with Toronto-based Coinsquare. A lack of banking support for cryptocurrency-based companies is causing technical difficulties, Quadriga told Global News. And Canada’s financial regulators are of little help when things go wrong.

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‘Beyond bad customer service’

When Yi and Kim’s $100,000 failed to materialize into Yi’s Quadriga account, the couple said it tried in vain to contact Quadriga about it. The company doesn’t have a publicly available phone number and asks customers to get in touch with customer service through electronic tickets. Yi submitted multiple support requests but only received auto-reply emails, she told Global News.

Either Quadriga is a “scam” or “they have beyond bad customer service,” Yi said in a telephone interview before Global News contacted Quadriga.

Luckily, it turned out not to be a scam.


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The wire wasn’t processed because the couple had sent the wire from a Toronto-Dominion (TD) bank account in Kim’s name, which didn’t match the recipient account, which was in Yi’s name, Quadriga CEO Gerald Cotten told Global News.

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“We make it very clear that we don’t accept wires from third parties,” Cotten said. “We do that because we want to prevent fraud.”

READ MORE: Bitcoin price drops after Google announces ban on cryptocurrency ads

Yi and Kim had realized their mistake shortly after sending the wire but weren’t able to communicate that to Quadriga.

The company told Global News it didn’t process the couple’s support requests because they did not follow instructions at the bottom of its auto-replies that read: “If this email and Support Centre content didn’t provide the answer you were looking for, please reply back with ‘the content within this email and Support Centre didn’t help, please assist’ and your ticket will be positioned back in the queue for a support agent to respond to.”

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Yi said she simply didn’t notice the instructions, which came after 800 words of text that walks Quadriga customers through common customer support issues, according to a Quadriga auto-reply viewed by Global News.

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Quadriga CEO Cotten said the company decided to do away with phone support because “there were far too many people calling who wanted us to teach them about Bitcoin.”

In general, having customers calling doesn’t work well when dealing with cryptocurrency transactions, he added.

Every Bitcoin transaction is associated with a unique alphanumeric identifier of about 30 characters. Having customers read that code over the phone is “a bit of a disaster,” which is why many cryptocurrency exchanges have no phone support, Cotten said.

READ MORE: Bitcoin creeps into the Toronto real estate market

When it comes to electronic customer service requests, Quadriga decided to include a standard Q&A at the top of its auto-reply email after receiving an unmanageable number of queries about questions the company had already answered on its website, Cotten told Global News.

Cotten did, however, acknowledge that Quadriga’s current customer service process needs “fine tuning” and told Global News that the company “is looking at changing that.”

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Lack of banking support, rules for cryptocurrency exchanges

Yi and Kim are hardly the only Quadriga customers who say they have experienced trouble getting money in and out of Quadriga accounts.

Asadullah Baryar, a criminology student at York University in Toronto, said he tried to transfer $1,064 from his bank account to his Quadriga account via two electronic funds transfers (EFTs) on Jan. 8 but is still waiting for the funds to land.

Baryar told Global News he was unable to contact Quadriga customer service but was confident his funds would eventually reappear after having several other types of transactions processed by the exchange with no issue.

Quadriga has halted ETF funding with no plans to reinstate the service.

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READ MORE: New Brunswick warns about cryptocurrency bank illegally operating in province

Cotten said his company, like other cyrptocurrency exchanges, has been struggling with a lack of support from Canada’s banks. “They do not deal with Bitcoin companies,” he told Global News.

This forces cryptocurrency exchanges to rely on third-party payment processors, which work with financial institutions to manage electronic transactions. And recently, some of Canada’s biggest banks are refusing to process cryptocurrency transactions even through payment processors, according to Cotten.

Quadriga now relies on a Portuguese bank to process many of its currency transfers, he added.

Still, the abrupt withdrawal of banking support to Canadian payment processors has left some customer transactions in limbo, with Quadriga waiting on the banks to unwind several transfers, according to Cotten.

READ MORE: Who owns crashing Bitcoin? Mostly young men

Global News asked all of Canada’s six largest banks whether they currently have a policy of not servicing crypto-related companies as well as the payment processor servicing them.

Canadian Imperial Bank of Commerce (CIBC), TD, Bank of Nova Scotia (Scotiabank) and National Bank did not address the specific questions but said they are monitoring the cryptocurrency sector.

Global News also asked each bank whether it allows credit and debit card purchases of cryptocurrency.

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TD said it “recently made the decision to pause on allowing cryptocurrency purchases via credit cards to conduct a review and assessment of this evolving market.”

READ MORE: TD Bank becomes latest to bar customers from using credit to buy cryptocurrency

Scotiabank said it stopped processing cryptocurrency purchases on Scotiabank credit cards effective March 5. However, the bank does not prevent its customers from purchasing cryptocurrencies with their own funds, including via debit card, it said via email.

READ MORE: Winnipeg police explain how to spot and avoid bitcoin scams

National Bank and CIBC did not address Global News questions about whether they allow debit and credit card purchases of cryptocurrency.

The Royal Bank of Canada (RBC) declined to answer all questions, and the Bank of Montreal (BMO) failed to respond to several requests for comment.

BMO stopped allowing retail consumers to buy cryptocurrencies using Mastercard-branded credit or debit cards, the Canadian Press reported in mid-March.

Although cryptocurrencies are not illegal in Canada, Canada’s federal banking regulator does not prevent financial institutions from denying their services to cryptocurrency companies or customers wishing to buy virtual money with their own funds.

READ MORE: Facebook suspends all Bitcoin, cryptocurrency advertisements

The Office of the Superintendent of Financial Institutions (OSFI), who oversees federally registered banks, “has not issued any specific guidance nor has it prohibited handling cryptocurrencies,” OSFI spokesperson Sylviane Desparois told Global News via email.

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“It’s up to the banks to develop their own products and policies around cryptocurrencies … What OSFI cares about is that they do so while taking into consideration the risks such areas may represent,” Desparois also said via email.

Quadriga told Global News it voluntarily complies with regulations from the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC), Canada’s anti-money laundering agency.

The Harper government introduced new rules on money laundering and terrorism financing for financial companies dealing in virtual currencies in its 2014 budget. The rules, however, have yet to come into effect.

READ MORE: Why Canada is poised to become a prime destination for Bitcoin mining

Little help for Canadians when things go wrong

Around two months after losing track of their $100,000, Yi and Kim turned to the Royal Canadian Mounted Police (RCMP). The couple filed a complaint against Quadriga with the Coquitlam RCMP  shortly before contacting Global News. (Yi said she has since asked the RCMP to drop the complaint. The RCMP told Global News that the complaint would likely be dropped soon.)

When Global News asked a number of provincial and federal financial regulators whether they would be able to assist Canadians faced with cryptocurrency fraud, all of them responded that they wouldn’t be able to help.

READ MORE: No, you can’t pay your taxes in Bitcoin: Mounties issue warning on new twist to CRA scam

“At this time, digital currencies are not supported by any government or central authority, such as the Bank of Canada. Financial institutions, such as banks or credit unions, don’t manage or oversee digital currency,” the Financial Consumer Agency of Canada told Global News.

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The British Columbia Securities Commission (BCSC), which oversees the province’s securities market, said it regulates cyptocurrencies when they are considered to be securities.

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“In order for securities laws to be triggered by a cryptocurrency or cryptocurrency exchange, the BCSC must first determine that the cryptocurrency involved is a security,” the regulator said via email. However, it added, “some common cryptocurrencies that people are familiar with, for example Bitcoin, are not considered to be securities by the BCSC.”

Payments Canada did not return two requests for comment.

Yi and Kim’s case turned out to be about customer service problems. And Quadriga says none of its customers have ever lost money due to a funding or withdrawal issue.

Other Canadians faced with actual cryptocurrency fraud, however, may have a hard time finding someone who can help.


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