NSW Negligence by BTC Markets - Where Do I Stand?

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SuKar

Active Member
11 March 2017
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0
31
On 10-Jan-2017, BTCMarkets.net disabled the 2FA (Two Factor Authentication) of my Online Trading account which resulted in the Fraudulent transactions (by unknown party) that wiped away $16,042.08 from my online Trading account.

BTC Markets support mentioned that my email account has been compromised! BTC Markets disabled the 2FA of my Online Trading account as they received an email from my email account "to disable the 2FA as my phone was Stolen". In response to that email, BTC Markets requested my Account Number, Full Name, Address, Date of Birth and Account balance. BTC Markets received an email with responses to their query. Hence, BTC Markets disabled the 2FA of my account. Immediately after the 2FA was disabled, I the entire amount ($16,042.08) was stolen by buying Bitcoins at market price and transferred them to somewhere.

Had BTC Markets not disabled the 2FA of my my Online Trading account, this Cyber Crime would not have taken place.

The following points demonstrates that BTC Markets administration breached the duty of care (act of negligence) to secure my online trading account:

As per the BTC Markets online instructions the disabling of the 2FA security should be done only by the End User. Unlike the 1st level security which is defined on email, 2FA security is the 2nd Level security defined on the Mobile Phone and should not be enabled based on any information received from email. 2FA is the 2nd level security which requires a Mobile phone and SECRET KEY (Secret Key is generated by the system when the 2FA was enabled and is known only to End User). 2FA should be Enabled/Disabled only by End User as required.

BTC Markets did not made any validation of the Mobile number before disabling the 2FA which defeated the very purpose of having 2FA security in place

BTC Markets disabled 2FA security of my online Trading account without the proper scrutiny of the response shared by the hacker via email. "Street Type" and "Account Balance" details provided by the hacker are not correct.

I do not see any of the emails shared by BTC Markets in my email account. BTC Markets mentioned that all the emails were deleted by the Hacker to hide the evidence. Unlike mentioned by BTC Markets that my email account was hacked, it is yet to be proven

Based on the emails shared by BTC Markets support all the email correspondence between hacker and BTC Markets happened after the business hours on 10-Jan-2017 @ 17:38 Hrs and @ 20:32 hours immediately after an additional $10,000 was transferred into my Online Trading account.
Police will just register a criminal case but won't recover my funds.

Fair Trading mentioned that they do not have authority to direct BTC Markets to make the payments despite all the evidence.

I would like to know where I would stand under Australian Consumer Law creating a civil-case against this company.

Can, I include the in the claim Lost Money + Depreciation due to increase in the market value of the currency + Interest (?) for 2 months + Loss revenue for unable to investment for 2 months?

Thanks for any help.
 

SuKar

Active Member
11 March 2017
11
0
31
Earlier this week, BTC Markets offered to compensate 50% of the lost funds on good will basis, if I sign an agreement with special terms and conditions. If I sign this agreement, I will lose my legal rights to pursue BTC Markets.
 

Iamthelaw

Well-Known Member
13 September 2016
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794
This isn't a criminal matter, try posting in the commercial section.

Having said that, I note that part of the terms is that you give up your right to pursue BTC markets, what are the other terms of the 50% agreement you speak of?

You could also come back with a counter-offer of a greater percentage. This could be quite cost-effective as you won't have to go through the time and stress of legal proceedings. Moreover, you run the likelihood of being even further out of pocket in your legal fees, their legal fees and be left with nothing, if you're not successful. On the other hand, even if you are successful, the default position in the run of the mill case is that costs would be awarded on a standard costs basis - meaning that you wouldn't recoup 100% of your legal fees anyway - Some food for thought.

Perhaps you could write back to the company in question with a higher counter offer?
 

SuKar

Active Member
11 March 2017
11
0
31
I sincerely appreciate your inputs. BTC Markets mentioned that my email account was hacked. Please clarify why you believe that this is not a Criminal matter. Is Cyber Crime not a criminal matter.

If you could provide your personal email address, I can forward the Agreement document which has all the terms & conditions. I already negotiated directly with BTC Markets and also through Fair Trading but 50% is the maximum they have agreed to pay
 

Iamthelaw

Well-Known Member
13 September 2016
412
86
794
I sincerely appreciate your inputs. BTC Markets mentioned that My email account was hacked. Please clarify why you believe that this is not a Criminal matter. Is Cyber Crime not a criminal matter.

If you could provide your personal email address, I can forward the Agreement document which has all the terms & conditions. I already negotiated directly with BTC Markets and also through Fair Trading but 50% is the maximum they have agreed to pay
The unlawful entry into your account and theft of your funds is a criminal matter - Report it to the police. The crux of your post related to the loss you'd suffered as a result of the website not adequately securing your site and you stated you wish to pursue the loss via them - That is not a criminal matter.
 

SuKar

Active Member
11 March 2017
11
0
31
The unlawful entry into your account and theft of your funds is a criminal matter - Report it to the police. The crux of your post related to the loss you'd suffered as a result of the website not adequately securing your site and you stated you wish to pursue the loss via them - That is not a criminal matter.
Thanks for the update. However, on my preliminary discussions. Police will just register a criminal case but may not recover my funds. Moreover, Police priority happens to be violence and may take a very long time before they commence the investigation on this matter.
 

Iamthelaw

Well-Known Member
13 September 2016
412
86
794
Thanks for the update. However, on my preliminary discussions, Police will just register a criminal case but may not recover my funds. Moreover, Police priority happens to be violence and may take a very long time before they commence the investigation on this matter.
You still should make a police report, if you haven't already done so.

Now you're back at square one which is pursuing the company for the loss you've incurred - Again, not a criminal matter.
 

SuKar

Active Member
11 March 2017
11
0
31
You still should make a police report, if you haven't already done so.

Now you're back at square one which is pursuing the company for the loss you've incurred - Again, not a criminal matter.
Thanks. Would you be able to guide me who can assist to draft a claim for act of negligence or provide a sample claim? Hope this claim can be lodged in NCAT
 

Rod

Lawyer
LawTap Verified
27 May 2014
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Can, I include in the claim "Money lost i.e. $16,042.08" + Depreciation due to increase in the market value of the currency + Interest for 2 months + Loss revenue for unable to investment for 2 months?
Yes, for money lost.

Probably yes for interest lost.

No for investment returns. These are not quantifiable, despite what you say you WOULD have done with the money. The law likes to deal with known values, not speculate over what might have happened.

For a $16K claim, I like the advice you received in the criminal law forum and attempt to negotiate a higher settlement figure. Even at $8K it saves a lot of time and hassle and risk.

Your call though. Sometimes people prefer the principle to the money.
 
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SuKar

Active Member
11 March 2017
11
0
31
Yes for money lost.
Probably yes for interest lost.
No for investment returns. These are not quantifiable, despite what you say you WOULD have done with the money. The law likes to deal with known values, not speculate over what might have happened.

For a $16K claim, I like the advice you received in the criminal law forum and attempt to negotiate a higher settlement figure. Even at $8K it saves a lot of time and hassle and risk.

Your call though. Sometimes people prefer the principle to the money.
Myself and also Fair Trading negotiated with BTC Markets but they are not willing to pay more than 50%. Moreover the 5 page agreement document received from BTC Markets states that, I should dismiss all legal proceedings and stop seeking Legal advise against the company.

BTC Markets is covering their negligence of the duty of care in protecting the security of my account in the Agreement. The Agreement states the following points which are incorrect.
  • I claimed that my account was compromised by third party. In fact, this statement was made by BTC Markets who mentioned that my email account was compromised. I have no evidence from my email account, the emails referred by BTC Markets
  • There is no mention about BTC Markets disabling the 2FA of my online Trading account which lead to the theft of funds in my account.
For no fault of mine, why should I lose 50% of my principle? Is this not a straightforward case to prove in the court?