Case Study Details

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International Investment Law

International Investment Law

Case Details

Client: Christina Colt
Attorney: Robert Blanchet
Case Start: 08/04/2021
Execution Time: 8 Months
Result: Winner
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Summary Of The Case Studies

Christina was browsing the internet and came across an advert which suggested that two well-known celebrities had made huge profits investing in cryptocurrency. The advert took her through to a website, which asked for contact details if you were interested in receiving more information. Christina added her details and soon afterwards she received a call back. The caller claimed they could help her make money by investing in cryptocurrency. They would act as her ‘account manager’ and would help her to place ‘trades’ through an account on their trading platform – which they would open for her. In order to invest, Christina was told that she first needed to open an account with a crypto-exchange – a website offering the ability to turn her pounds sterling into cryptocurrency. Christina wasn’t sure about how to do this – so her account manager, as part of the ‘service’ he would provide, suggested she download some software which would allow him to guide her through the setting up process on her computer. Christina did not consider herself technologically minded, so was relieved to get this help as she was worried it might be complicated to set up by herself.

The Problems Being Encountered of the Case

Christina transferred 1,000 sterling to her account at the crypto exchange, purchased some Bitcoin and then sent it on to what she believed was her trading account with the caller’s trading platform. She could see the value of her investment by logging into the trading platform. Initially she appeared to be doing very well, her investment increased in value and she was persuaded to invest more – in the end Christina was making payments in excess of several thousand pounds at a time. When Christina asked to withdraw her investment, the account manager said she’d need to pay substantial fees to do this. This made Christina suspicious and she contacted the bank to report she’d been the victim of a scam. Unfortunately it transpired that the ‘trading platform’ Christina thought had been showing her how well her investment has been doing was an illusion created by the fraudster and merely part of the scam. Christina’s bank argued that she hadn’t suffered a financial loss by making payments to her own cryptocurrency account. It argued that she should instead pursue the matter with the crypto exchange.

Our Approach And Solution

The CRM Code did not cover this type of transaction, because the payments Christina made from her bank account were sent to an account held in her own name with the crypto exchange. However, outside of the CRM Code, banks have other fraud prevention obligations – including to look out for unusual transactions.

Attorney In This Case:

Robert Blanchet

Lawyer, Consultant

Why choose this lawyer: Robert studied business administration and law in Wiesbaden and Mainz and received his doctorate from the University of Cologne for …

Our Working Process and Solution

We thought the spending on Christina’s account was very unusual for her and – after the first few payments – the pattern of transfers from her account should have caused the bank some concern meaning that it ought to have intervened. We thought that if the bank had asked Christina about the transactions she would have told it what she was doing. Even though the payments went to a crypto account in her own name, we felt that the bank was sufficiently aware of the common features of this kind of scam and should have warned about the risk of being scammed and the need for her to make further enquires at this point. As Christina’s circumstances had many of the hallmarks of a cryptocurrency scam and taking into account what we learnt about Christina through the course of the complaint, we thought a conversation would have made a difference and would, more likely than not, have prevented further loss.

Solutions 1 Solutions 2 Solutions 3

Taking the case to the court for recovering Christina’s funds

Sueing the bank about not helping Christina about the scam

Taking the case to the PD to find the “trading company” and recover Christina’s funds

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The Outcome of the Lawsuit

In deciding fair compensation, we also considered if would be fair for Christina to bear any additional responsibility for what happened. However, as we thought the trading platform and correspondence with the fraudsters was very convincing, we decided against that on the facts of this case. So we asked the bank to refund all the transactions which took place after the point we thought it should have intervened.

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