Fraud Awareness :
We publish Fraud Awareness blogs as large-scale frauds continue unabated in Canada. Our firm often reminds fraud victims that they cannot reasnably rely on Canada’s criminal system for recovery or justice in fraud matters. The criminal courts govern prosecutions by what is in the public interest, not private interests. Victims should assess whether their interests are better served with civil court tracing and freezing remedies as opposed to relying on the criminal system for justice.
Case Summary:
Su v. Atom Holdings, 2025 BCCA 199
Judgment: June 16, 2025
On appeal from Atom Holdings (Re), 2024 BCSC 1397
Atom Holdings was a Cayman Islands-based cryptocurrency holding company for a number of internationally incorporated subsidiary companies, known collectively as the AAX Group (or “the Group”). The AAX Group operated a cryptocurrency exchange platform known as the AAX Platform. In November 2022, the AAX Group collapsed, leaving users unable to withdraw substantial assets from the AAX Platform.
Since its collapse, the directors, officers, and management of the AAX Group resigned or went into hiding. Several have been arrested. Atom Holdings is being liquidated. By order of the Grand Court of the Cayman Islands, George Kimberley Leck was appointed the official liquidator (the “Trustee”).
The appellant, Weiyi Su (aka Victor Su), is a former director of Atom Holdings. At the material times, Mr. Su resided in West Vancouver. Atom Holdings alleged that Mr. Su diverted cryptocurrencies worth millions of dollars from the AAX Group. On July 18, 2024, Mr. Su was arrested in Hong Kong on charges alleging theft of cryptocurrencies valued at approximately US$16.74 million.
The Trustee initiated court proceedings in various jurisdictions to recover assets of the AAX Group. In British Columbia, the Trustee filed a petition under the Bankruptcy and Insolvency Act, (“BIA”) R.S.C. 1985, c. B-3 (“Bankruptcy Proceeding”). On April 8, 2024, the Trustee also commenced a civil action against Mr. Su (“Civil Action”).
The Trustee filed an affidavit in support of his ex parte civil motion, to be executed in British Columbia, for an Anton Piller order (“APO”) and an application for an order under s. 272 of the BIA to search for, seize, examine and preserve certain evidence and digital assets (an order similar to an APO).
Extensive evidence was also provided by Matthew Devost, a cybersecurity expert hired by the Trustee to assist in his investigation. Most of Mr. Devost’s affidavit was based on his review of AAX Group company records and materials that indicated that Mr. Su had access to, and control over, significant assets held by the Group. The records also indicated that a significant portion of those assets had been dispersed and moved from AAX-controlled “wallets” to unknown wallet addresses.
Subsequent to the execution of the APO and the s. 272 BIA order in Vancouver, the Trustee brought another motion in the civil proceedings for a Mareva injunction. At this second ex parte hearing the Trustee relied on data preserved from the APO, post-APO crypto transfers from an AAX Group wallet of $2.8M USD and $16M USD of crypto to an unknown wallet(s), and a cell phone that held AAX Group cryptocurrency. The motion judge granted the Mareva injunction.
Mr. Su thereafter retained counsel and applied to set aside the orders in both the Bankruptcy Proceeding and the Civil Action. He was granted leave to appeal the orders made in the Bankruptcy Proceeding: Su v. Atom Holdings, 2024 BCCA 386. Mr. Su appealed by right in the Civil Action. The chambers judge dismissed Mr. Su’s applications: Atom Holdings (Re), 2024 BCSC 1397 (“RFJ”).
During the set aside motion process, Mr. Su failed to provide full access to digital assets as required by the APO, swore false affidavits of assets that omitted various bank records, and refused to answer questions during a court-ordered examination.
Mr. Su alleged that the Trustee failed to disclose extracts from a transcript of an AAX Group employee – a Mr. Lin. Mr. Su also alleged that the Trustee’s investigator used extortive and dishonest tactics against Mr. Lin to coerce him to give a sworn statement to assist the Trustee. Mr. Su alleged that Mr. Lin was told he would be subject to criminal charges unless he cooperated, and that he was the “number one suspect” unless he cooperated. Mr. Su alleged that others had access to the wallets.
Mr. Su submitted that the ex parte orders should have been set aside based on the Trustee’s criminal threats and interview trickery. The motion judge, however, ruled that he would have made the same ex parte decisions even without the Lin transcript and even if he had been shown the extracts of the Lin transcript that had not been disclosed. The motion judge further ruled that even if an appeals court found the non-disclosure material, he would re-issue the orders afresh based on the evidence obtained during the APO and the circumstances of Mr. Su’s criminal arrest in Hong Kong thereafter.
The BC Court of Appeal essentially granted deference to the motion judge’s findings of fact. As the decisions were based on equitable principles in the Civil Action, the motion judge’s decisions were also granted deference. The BC Court of Appeal also found there were no errors in the application of the law. Mr. Su’s appeals were dismissed.
Our commentary:
effective fraud recovery is a combination of awareness of the relevant case law, being educated with respect to the rules and processes of the court, and experience in handling such cases. There is no “one strategy fits all” solution for fraud victims.
Essentially, the Courts held that the rogue’s conduct was so egregious that even if the victim engaged in serious misconduct to prove its case, that serious misconduct would not result in the rogue getting away with his fraud. Another way of stating this is that the Charter was not imposed into a civil proceeding to benefit a rogue and to derail justice as happens in criminal cases.
What sometimes happens in cases where there is victim “misconduct”, is that costs are not granted to the victim. Obviously, what may be discretionary balance tilted in favour of the victim in one case by one judge may be tilted to the rogue in by another judge. There is significant risk in litigating these cases.