TLDR: FACTOR Canada, a vital supporter of the Canadian music industry, reported a $9.8 million cybertheft from its Scotiabank account, igniting a legal battle for recovery.
FACTOR Canada, the backbone of Canadian music funding, revealed a jaw-dropping cybertheft incident where roughly $9.8 million ($9,772,875.33) vanished from its Scotiabank account on June 12, 2024. According to Exclaim! Magazine and Billboard Magazine, this staggering loss has sent shockwaves through Canada’s music industry.
FACTOR, which dispenses millions in grants yearly to support Canadian artists, called the theft “a significant financial crime” and pointed fingers at Scotiabank’s security practices. As reported by The Globe and Mail, the theft was set in motion when a new user registered with FACTOR’s bank account, using the name of a former chief financial officer at the company, was issued a digital token to the new user on January 18 by Scotiabank, with no notice given to FACTOR.
“The intruder gained access to FACTOR’s account from an IP address that had never accessed our account and using an @outlook.com email, not a @factor.ca email address.”
The stolen funds, part of a $14.3 million federal grant deposit, were transferred to a Quebec-based numbered company before being converted into cryptocurrency. The alleged orchestrator, James Campagna—named by FACTOR In their statement—denies involvement, claiming the funds were used for bitcoin mining machines.
In its statement, FACTOR detailed a timeline of negligence, highlighting Scotiabank’s issuance of a digital token to an unauthorized user and failure to alert the organization to suspicious activity.
“FACTOR has spent substantial time and funds on several independent investigations, all of which concluded no breach of FACTOR’s systems occurred,” claims FACTOR’s statement. “FACTOR’s board retained expert investigators and forensic teams and stands behind their findings – as all four independent investigations have found no evidence that FACTOR or any of their employees, agents, or contractors were in any way responsible.”
Despite the setback, FACTOR assured artists and stakeholders that it is “vigorously pursuing” recovery efforts. The organization has filed lawsuits against Scotiabank and other involved parties, accusing them of negligence and obstruction.
As FACTOR’s Director of Communications Marcus Tamm told Exclaim! in a recent email, “he and many of his colleagues will be in court this Friday (November 29) at 10 a.m., when Justice Black is scheduled to determine how to proceed with the case.” While legal proceedings unfold, FACTOR has bolstered its security protocols and switched daily banking operations to a new institution.
