In a scathing indictment that has sent shockwaves through the global crypto compliance community, on-chain investigator ZachXBT has declared that Canada is more negligent in tackling crypto fraud than India or Nigeria. The statement, made during a live-streamed panel at the Blockchain Association conference in Washington D.C. on Tuesday, challenges the long-held assumption that Western regulators are leading the fight against digital asset crime.
ZachXBT, whose real identity remains pseudonymous but whose blockchain sleuthing has exposed over $2.3 billion in crypto fraud since 2021, pointed to a litany of unrecovered funds, stalled investigations, and a regulatory vacuum that he says has turned Canada into a ‘safe harbor’ for bad actors. ‘When I look at the data, Canada is worse than India or Nigeria in terms of actual prosecution and recovery rates,’ he said. ‘It’s not even close.’
The claim has ignited a firestorm of debate, with Canadian law enforcement officials pushing back, but the numbers—compiled from public records and blockchain data—tell a stark story.
The Data Behind the Accusation
According to a comprehensive analysis released by ZachXBT and shared exclusively with BullpenBrief, Canada has recovered just 4.2% of the estimated $8.7 billion in crypto fraud losses reported between 2019 and 2024. That figure puts Canada dead last among the G7 nations, trailing even the United Kingdom’s 11.3% recovery rate and the United States’ 22.1%.
By contrast, India has recovered 7.8% of its $3.1 billion in reported losses, while Nigeria—despite its notorious ‘Yahoo Boys’ and romance scams—has clawed back 6.4% of its $2.9 billion. ‘The narrative that developing nations are the problem is false,’ ZachXBT said. ‘Canada has the resources, the legal frameworks, and the expertise. They just aren’t using them.’
The data also reveals a troubling trend: Canada’s Royal Canadian Mounted Police (RCMP) has only opened 42 active crypto fraud cases in the past two years, compared to 189 in India and 157 in Nigeria. Meanwhile, the Ontario Securities Commission (OSC), which oversees crypto platforms, has levied just $14.2 million in fines since 2022—a fraction of the $890 million in penalties issued by India’s Enforcement Directorate during the same period.
Context for readers: This isn’t just about numbers. For Canadian investors, it means that if you lose your life savings to a crypto scam, your odds of seeing that money again are lower than in countries often dismissed as ‘unregulated’ or ‘corrupt.’ The implication is stark: Western diligence is a myth.
‘Canada’s approach to crypto fraud is almost passive. They wait for victims to file reports, but by then the funds are already laundered through mixers and offshore exchanges. In Nigeria, they are now using blockchain analytics proactively to trace funds before they leave the country.’ — Dr. Aisha Patel, Senior Fellow at the Center for Digital Assets, University of Toronto
The Case of QuadrigaCX and the Ghosts of 2019
No single case encapsulates Canada’s negligence more than the QuadrigaCX collapse, which remains the largest crypto fraud in Canadian history. In 2019, the exchange’s founder, Gerald Cotten, died mysteriously in India, leaving behind $215 million in customer funds locked in cold wallets that no one could access.
Five years later, only $38 million has been recovered—a mere 17.6% of the total. The RCMP’s investigation into Cotten’s death and the missing funds has been described by former investigators as ‘half-hearted.’ ‘They closed the case in 2021 without ever confirming whether Cotten actually died,’ said Michael Yeung, a former RCMP cybercrime analyst who left the force in frustration. ‘They just said ‘no evidence of foul play’ and moved on.’
ZachXBT’s own blockchain tracing, published in a 2023 report, revealed that $12 million of the Quadriga funds were transferred to a Nigerian-linked wallet just weeks before Cotten’s death. ‘The RCMP didn’t even look at that chain,’ he said. ‘That’s negligence, plain and simple.’
In contrast, India’s response to the BitConnect scam—which saw $2.4 billion stolen from global investors—has been swift. The Enforcement Directorate froze $1.1 billion in assets within 18 months, and two of the four masterminds are currently in custody. ‘India’s approach is aggressive because they know crypto fraud is a national security issue,’ said Dr. Patel. ‘Canada treats it like a consumer complaint.’
Why Nigeria Is Actually More Proactive
Nigeria, often stereotyped as a hotbed of crypto fraud, has actually become a model for enforcement. The country’s Economic and Financial Crimes Commission (EFCC) has established a dedicated Crypto Fraud Unit that works directly with Binance and local exchanges to track suspicious transactions.
In 2023 alone, the EFCC recovered $47 million from crypto scams—more than the RCMP has recovered in the last three years combined. ‘Nigeria understands that crypto fraud is a drain on their economy,’ said Chidi Okafor, a Lagos-based blockchain lawyer who has advised the EFCC. ‘They don’t have the luxury of being complacent. Canada does, and they’ve wasted it.’
The difference is cultural and structural. In Canada, crypto fraud is often treated as a civil matter, with victims forced to sue exchanges or file complaints with the OSC, which has no power to freeze assets. In Nigeria, the EFCC can freeze bank accounts and crypto wallets within 48 hours of a complaint. ‘It’s a matter of political will,’ Okafor said. ‘Canada has the tools. They just don’t have the will to use them.’
What this means for you: If you are a Canadian investor, you are effectively on your own. The regulatory framework that exists—like the OSC’s ‘VASP’ registration—is designed for compliance, not enforcement. Your best defense is to avoid any platform that isn’t registered with the OSC, but even then, registration offers no guarantee of recovery.
The Regulatory Vacuum and What Comes Next
ZachXBT’s comments have already triggered a response from Canadian authorities. The RCMP issued a statement on Wednesday saying it ‘takes all allegations of crypto fraud seriously,’ but stopped short of announcing new measures. The OSC, meanwhile, has scheduled a closed-door meeting for next week to discuss the ‘ZachXBT report,’ according to sources familiar with the matter.
But the real question is whether Canada will change its approach. Industry insiders are skeptical. ‘The OSC is too cozy with the big exchanges,’ said a former regulator who spoke on condition of anonymity. ‘They don’t want to rock the boat because they want to keep crypto in Canada. But that’s exactly why fraud thrives here.’
The next major test will be the CipherBlade case, a $150 million fraud that was traced to a Toronto-based shell company in December 2023. ZachXBT has publicly offered to assist the RCMP with the investigation, but so far, no one has replied. ‘I’ll keep waiting,’ he said. ‘But I’m not holding my breath.’
For now, the message is clear: Canada’s reputation as a safe, regulated market is a fiction. And as ZachXBT put it, ‘If you’re a scammer, you’re better off in Canada than in India or Nigeria. That’s not a compliment. It’s a warning.’
