Executive Summary: Key Legal and Evidentiary Issues

• Jurisdictional limits over foreign online platforms, focusing on whether Binance “carries on business” in British Columbia for in personam jurisdiction in a disclosure and preservation petition.
• Scope of the duty of full and frank disclosure on a without notice (ex parte) application, and how incomplete evidence about Binance’s Canadian withdrawal amounted to material non-disclosure.
• Evaluation of blockchain tracing evidence, including the reliability of following bitcoin through an omnibus exchange (BigONE) where funds from multiple users are commingled.
• Application of leading cases on online activity and jurisdiction (Club Resorts v. Van Breda, Equustek, and Shirodkar) to a cryptocurrency exchange with only residual custodial functions for Canadian legacy accounts.
• Discretion to continue, vary, or set aside Norwich and preservation orders after hearing from the respondent and considering fresh evidence.
• Costs consequences of material non-disclosure, including when such conduct justifies special costs versus ordinary costs on the normal tariff.

Background and alleged cryptocurrency fraud

Mr. Lixiao Wang alleged that he was the victim of a large-scale cryptocurrency investment scam orchestrated through a website called www.weeexproit.com. In early 2024, he was contacted on WhatsApp by a person identifying herself as “Qin Xin,” who claimed to live in Vancouver and to be a cryptocurrency investment expert. She urged him to open an account on weeexproit.com and to participate in “events” that required substantial upfront investment, with the promise that he could later withdraw his funds and enjoy a return. Because he lacked sufficient capital, Ms. Xin offered to invest with him and told him she had transferred cryptocurrency into his weeexproit.com account, which he could repay after the events. Acting on these representations, Mr. Wang made 13 bitcoin transfers from his own digital wallet to weeexproit.com, with a total value in excess of USD $26 million. When the second event ended, Mr. Wang tried to log in and withdraw his funds, only to find his account inaccessible. Weeexproit’s support team told him his account was locked due to cyberattacks, and insisted that he deposit nearly $6 million more to fund a “security audit” before his account could be unlocked. Suspicious of this demand, he refused to pay and was never able to regain access to the account or recover the bitcoin.

Investigations and tracing of the bitcoin

To investigate the fraud and trace his missing assets, Mr. Wang retained a private investigator, Sean Tweed. Mr. Tweed quickly determined that the British Columbia driver’s licence image provided by “Qin Xin” was fake, and that photographs said to depict her appeared on multiple websites, suggesting the persona itself was fabricated. He then conducted a blockchain analysis and prepared a report tracking the flow of the 13 bitcoin deposits from Mr. Wang’s digital wallet into weeexproit.com. Using transaction hashes (64-character hexadecimal strings that function as digital receipts for each transaction), he traced several of the deposits through intermediary addresses into destinations he associated with wallets on Binance.com and on another major cryptocurrency exchange, Coinbase. In Mr. Tweed’s view, Binance and Coinbase would be able to correlate those blockchain addresses with specific customer accounts and, in turn, identify the account holders who had received the stolen bitcoin and disclose the history of related transactions. That tracing analysis formed the core evidentiary basis for Mr. Wang’s subsequent petition in the Supreme Court of British Columbia.

The petition for Norwich and preservation orders

In February 2025, Mr. Wang commenced a petition in the Supreme Court of British Columbia against Binance Holdings Ltd. and Coinbase Global, Inc. He did not allege that either platform had committed any substantive wrongdoing; they were named solely as third-party intermediaries believed to hold critical information and, potentially, remaining assets traceable to the fraudsters. The petition sought two main categories of relief: Norwich-type production orders compelling Binance and Coinbase to identify the account holders who had received the traced bitcoin, and preservation orders requiring those platforms to freeze and preserve any cryptocurrency or fiat funds held in the identified accounts. To ground jurisdiction, the petition pleaded that the case had a real and substantial connection to British Columbia, on the basis that the underlying tort was committed in the province and that the respondent platforms carried on business there. It invoked ss. 3(e) and 10 of the Court Jurisdiction and Proceedings Transfer Act, alleging that Binance had allowed British Columbians to access and trade on its exchange and had offered its application in Canadian app stores. Before serving the petition on the respondents, Mr. Wang set the matter down for a without notice (ex parte) hearing. He relied on four affidavits: his own affidavit describing the scam and the lost bitcoin; Mr. Tweed’s affidavit attaching the tracing report; an affidavit from Vancouver resident Greg McMullen, who described registering for and using a Binance.com account from Vancouver, including accessing that account as recently as 5 February 2025; and an affidavit from Ray Barbour, who provided corporate records searches, receipts for the 13 bitcoin transactions, and evidence that the Binance and Coinbase apps were available for download in Vancouver from the Apple App Store and Google Play store on 30 January 2025.

The initial without notice decision and jurisdictional reasoning

At the ex parte hearing in February 2025, Justice Elwood (in reasons later transcribed as 2025 BCSC 425) treated jurisdiction as a threshold issue and relied heavily on Equustek Solutions Inc. v. Google Inc. and an unreported decision, Jechow v. MEXC Global LLC. In Equustek, the Court of Appeal had recognised that while a merely “passive” website accessible from British Columbia does not suffice, an online business with a “real and substantial connection” to the province—such as by effectively carrying on key aspects of its business there—can properly be subject to in personam jurisdiction for injunctive relief. In Jechow, the Court had similarly found jurisdiction to impose a preservation order against an offshore crypto platform that could be accessed and used by a B.C. resident. Relying on the McMullen and Barbour affidavits, Justice Elwood accepted that the Binance app was available for download in British Columbia and allowed users there to create accounts, deposit funds, and trade cryptocurrencies, and that as of 5 February 2025 a Vancouver resident had logged into an active Binance account with a small bitcoin balance. On that foundation, the Court concluded there were sufficient connections to assume in personam jurisdiction over Binance and Coinbase and granted the Norwich and preservation orders requested by Mr. Wang.

Binance’s subsequent application and new evidence

After becoming aware of the ex parte orders, Binance appeared and applied to set them aside and to dismiss the petition as against it. In support, Binance filed an affidavit from Tim Molcsan-Spidel, an investigator with Ality Technologies Limited, a Canadian firm that provides services to Binance. He explained Binance’s actual Canadian posture. Binance, he deposed, had withdrawn from the Canadian digital asset marketplace in 2023. As of 1 June 2023, it had implemented measures to prevent persons located or resident in Canada from opening Binance.com accounts or trading in them, and its terms of use were amended to exclude Canadian users. On 25 September 2023, all existing Canadian accounts were placed into “liquidation-only” mode, so that affected customers could only initiate transactions required to withdraw or recover their assets; they could no longer deposit funds or trade cryptocurrency. While the Binance.com app could still be downloaded in Canada, it no longer functioned as a trading platform for Canadian users; at most, legacy account holders could log in and see or withdraw residual balances. Mr. Molcsan-Spidel also challenged the evidentiary basis for the tracing. He noted that Mr. Tweed’s report had traced a portion of the funds through an address associated with an omnibus wallet on another exchange, BigONE, which pools and commingles funds from many users. In his opinion, once crypto-assets had entered such an omnibus pool, they could not be reliably traced through that exchange to ultimate recipients on Binance.com.

The duty of full and frank disclosure on ex parte applications

On Binance’s motion to set aside, the Court first addressed whether there had been a breach of the strict duty of full and frank disclosure that governs ex parte applications. Relying on Su v. Atom Holdings and older authorities such as Gulf Islands Navigation v. Seafarers’ International Union and Brinks-MAT Ltd. v. Elcombe, Justice Elwood reiterated that an applicant without notice must disclose all matters that might reasonably influence the court, must make reasonable inquiries to uncover additional material facts, and must fairly raise any reasonably anticipated defences. If material non-disclosure is established, the reviewing judge can set the order aside without regard to the underlying merits, though the decision whether to revisit the merits remains discretionary. Applying those principles, the Court accepted that Binance had, in fact, blocked Canadians from opening new accounts in June 2023 and had limited existing Canadian accounts to liquidation-only transactions in September 2023. These facts were directly relevant to the earlier jurisdictional assessment, because the original ex parte reasons had incorrectly stated that the Binance app allowed British Columbians to create accounts, deposit funds and trade as of February 2025. The judge found that Mr. McMullen’s affidavit itself was accurate: he had opened his account in 2021, received an email about Binance’s “proactive” withdrawal from the Canadian marketplace in 2023, withdrawn most of his holdings, and on 5 February 2025 had successfully logged into an account that still held a small bitcoin balance, for which Binance continued to provide custodial services. However, when those facts were combined with the petition’s broader allegations that Binance was still offering a fully functional trading platform to British Columbians, the overall impression of Binance’s current operations was materially incomplete and misleading. In the Court’s view, reasonable inquiries by Mr. McMullen or by Mr. Wang’s then-counsel—such as consulting the updated terms of use or attempting any trade beyond nominal value—would have revealed that Canadian residents could no longer open accounts, deposit fresh funds or trade on Binance.com. Given that this would likely have altered the jurisdictional conclusion at the ex parte hearing, the Court held that there had been material non-disclosure sufficient to justify setting aside the without notice orders. By contrast, Binance’s complaint about the reliability of Mr. Tweed’s blockchain tracing through the BigONE omnibus wallet was treated as a merits issue, to be evaluated in light of the new evidence, rather than as a separate instance of non-disclosure.

Reassessment of jurisdiction and refusal to continue the orders

Despite the material non-disclosure, Justice Elwood chose to exercise the Brinks-MAT/Su discretion to consider the merits afresh, given that the non-disclosure appeared to be innocent rather than deliberate and that Mr. Wang was now self-represented. The Court then conducted a de novo jurisdictional analysis in light of the expanded evidentiary record. The governing framework was drawn from Club Resorts Ltd. v. Van Breda, under which “carrying on business” in the forum can serve as a connecting factor, but must be assessed carefully in the context of online enterprises. Simply having a website accessible in the province or advertising that reaches the province is not enough; there generally must be some “actual, not only virtual, presence” such as offices, staff, or core commercial activities occurring within the forum. In Equustek, for example, Google was found to be sufficiently connected to British Columbia because it sold advertising to local clients and collected data belonging to B.C. residents, activities that were integral to its business model even though its servers and staff were located elsewhere. Binance argued that, in contrast, it had never truly carried on business in British Columbia, even before 2023, and it relied by analogy on Shirodkar v. Coinbase Global, where the Ontario Superior Court held that offering trading services via a platform that could be virtually accessed from Ontario did not, by itself, amount to carrying on business in that province. Justice Elwood declined to decide the broader question of Binance’s pre-2023 status on the limited record before the Court, noting that any such ruling should await a case with a more complete evidentiary foundation. Focusing instead on the present circumstances, the Court concluded that, in the wake of Binance’s 2023 withdrawal from the Canadian market, it did not “carry on business” in British Columbia in the sense contemplated in Equustek and Van Breda. The evidence showed that Binance no longer allowed residents of the province to open accounts, deposit money, or trade cryptocurrency, and there was no proof that it sold advertising in B.C. or collected locally generated data as a revenue-generating activity. The only remaining connection was the residual custodial and recovery function for legacy Canadian account holders like Mr. McMullen, who could log in, see a small bitcoin balance, and initiate only those transactions necessary to recover existing funds. Those limited services were characterised as analogous to a passive website that can be accessed from the province, not as an active commercial presence soliciting or conducting business there. Against that backdrop, the Court held there were insufficient connections for it to assume in personam jurisdiction over Binance for the purposes of making Norwich and preservation orders. Because those were the only remedies sought against Binance in the petition, the petition had to be dismissed as against Binance.

Costs and the refusal of special costs

Finally, the Court addressed Binance’s request for special costs, which would have had a punitive or strongly deterrent character. Reviewing Garcia v. Crestbrook Forest Industries, Low v. Straiton Development Corporation, Westsea Construction, and Bank of Credit and Commerce International v. Akbar, Justice Elwood confirmed that special costs are reserved for “reprehensible” conduct—ranging from scandalous or outrageous behaviour to milder forms of misconduct that nonetheless warrant reproof or rebuke—and that they should be awarded sparingly. While material non-disclosure on an ex parte application can, in some circumstances, justify special costs, the Court distinguished this case from instances such as Canadian Western Bank v. John Doe, where severe evidentiary and pleading failures, including unfounded fraud allegations and misstatements of fact, had led to special costs. Here, Mr. Wang had not alleged any wrongdoing by Binance, had not misstated the evidence, and appeared to have proceeded in good faith in an effort to identify the unknown fraudsters who had defrauded him of millions in bitcoin. The jurisdictional misstep arose largely from the Court’s own misunderstanding of the incomplete record at the without notice stage rather than from any deliberate attempt by Mr. Wang to mislead the Court. In those circumstances, Justice Elwood found that Mr. Wang’s conduct did not reach the threshold of reprehensibility required for special costs. Instead, Binance was awarded its costs of the application on the ordinary scale, to be assessed under the normal tariffs, with no specific dollar amount fixed in the reasons. As a result, Binance was the successful party on the set-aside application: the February 2025 Norwich and preservation orders against it were vacated, the petition was dismissed as against Binance, and Binance obtained its standard costs with the exact monetary figure for those costs to be determined separately rather than in this judgment.