Eco-travel company We Are Bamboo lost millions in customer funds in cryptocurrency trading

A Kiwi-based ethical travel company lost millions of dollars on cryptocurrency trading before announcing it was folding and wouldn’t be refunding hundreds of customers for their prepaid trips, the Herald can reveal.

Customers have also laid complaints about Hutt Valley-based company We Are Bamboo with the police, Commerce Commission, and Serious Fraud Office (SFO).

Director Colin Salisbury put more than US$2 million ($3.24m) of customer funds into multiple cryptocurrency platforms from October 2020 until mid-2022, all of which was now lost, according to a report from liquidators BDO released last week.

About US$800,000 was also lost because it was put into fraudulent platforms which simply “ceased to exist”.

One affected customer said she felt “sick” now knowing the money was lost on crypto.

We Are Bamboo announced in late October it was closing, blaming the failure of the business partly on Covid.

Salisbury has not replied to repeated requests by the Herald for comment.

The police have closed their investigation and left further inquiries into We Are Bamboo with the SFO and Commerce Commission, which have suspended their investigations pending the outcome of the liquidation.

BDO has received close to 4000 emails from customers during the liquidation process.

The company allowed customers to book international holiday packages which included a portion of time spent volunteering in local communities, as a way for travellers to give back to the places they visited.

When asked by some customers whether they would be refunded the thousands of dollars already prepaid for future holidays, the company told them via email they would not be receiving refunds, invoking the “force majeure” section of their terms and conditions. Most of the customers were from the United States, Britain, Canada, and Australia.

In a statement at the time of its closure, the company also blamed the collapse on a group of customers who “were not prepared to wait [for delayed trips], and their actions and online influence have broken us, which impacts us all”.

“Our intentions here are not to play the victim but simply share with you the levels to which this group has gone to ensure our downfall, and made it their sole purpose to attack us, our families, our staff, and our customers with the intent to destroy Bamboo.

“Our lawyers have advised us that several individuals have crossed the line, and there is a case and evidence for criminal proceedings.”

But affected customer Kate Jeffries Hill said knowing now that the money was lost on crypto made her “sick”.

“To think they had the hide to blame us for their demise and continue to tell others we are the reason makes me so sick,” she told the Herald.

“No wonder they refused requests for our money to be returned.

“In my view, the funds the company had on hold for tours not yet supplied was not company funds. It should have been held in a secure account until travel restarted . . . They had no right to view this money as theirs to risk.”

Salisbury was summonsed and questioned under oath as part of the liquidation process at the end of May.

According to liquidator Iain Shepherd, Salisbury gave full access to the various platforms he used, allowing the liquidators to extract and analyse the relevant data and transactions.

“The director conducted some surface-level due diligence into foreign exchange and cryptocurrency trading, including some verbal discussions with his accountant and a cryptocurrency consultant,” Shepherd said in the report.

Salisbury claimed he was concerned about the US dollar’s ability to hold its value, and that there was significant uncertainty about the length of travel restrictions and inflationary threats due to the pandemic.

“His concern was that the cost of operating tours would significantly outweigh the funds available at a date in the future when tours could resume,” the report said.

He made 85 deposits to a popular cryptocurrency exchange, netting about US$2,153,427 after adjusting for the occasional withdrawal back to the company’s bank account.

“We understand these funds have been entirely lost. Once the funds had been deposited to the exchange, over 59,000 transactions occurred either buying or selling up to 27 cryptocurrencies.”

Salisbury also invested in four different fraudulent schemes, believed to have cost the company as much as US$800,000, the report said.

“It appears the director took reasonable steps to attempt to recover these funds. However, as they were funded via Bitcoin and Ethereum, the transactions were irreversible.”

Shepherd told the Herald those platforms “simply ceased to exist and disappeared, and therefore crypto they were holding more or less disappeared as well and was unable to be traced”.

He said there were “an awful lot of angry clients”. In his line of work it was not common to see companies fold due to losses in the crypto market, he said.

BDO will continue now with its review into the actions of management, directors, officers and advisers of the company and any potential claims against them.

It will also take steps to distribute available funds, if any, to unsecured creditors, and assess other areas of potential recovery. There is no estimate on how long the process is expected to take.

Another customer, Sheryl Yesucevitz, said it was “shocking” to discover their deposits had been essentially “gambled” away.

“I find it shocking that our money was used for crypto trading. How do you use money that wasn’t yours in such a risky investment?” she said.

“I think finding out where some of the money went almost made it worse, it’s hard to describe how it feels.”

She received just under half of her deposit back through a chargeback on her credit card.

“I guess what I would say to them is, ‘How dare you take money from hard-working people and gamble with it. That money should have been in a bank earmarked for us, not yours to take, not yours to risk’.

“The fact that you continuously blame us for your demise is sad and sickening, and hopefully when this is over, there will be some consequence for your actions.”

Michelle Morefield, who helps run a Facebook page for affected customers, said the news was “shocking and infuriating”.

She said many people worked double shifts to pay for their trips, and some booked the travel to celebrate beating cancer or commemorate the loss of a loved one.

“Bottom line, we just wanted to have a little fun, meet new people and help make a difference for others. But what is abundantly clear now is that it was the tour guides that delivered this to us and made sure we were taken care of and had a great time, and they were the ones that were passionate about teaching us about their countries and helping people in their communities.”

Melissa Nightingale is a Wellington-based reporter who covers crime, justice, and news in the capital. She joined the Herald in 2016 and has worked as a journalist for 10 years.