The British Columbia Securities Commission (BCSC) has charged Vancouver-based non-functioning cryptocurrency platform ezBtc with defrauding investors and defrauding them of $13 million.
According to local media, the regulator accused the creator of the BCSC, David Smillie, of organizing a multimillion-dollar securities fraud scheme. During the period from 2016 to 2019, users transferred more than 2,300 bitcoins and 600 ethers to the ezBtc platform.
Smillie assured investors that their assets were safely stored in cold storage, but the platform did not have enough reserves to cover user funds. The creator of the platform deceived his customers by using their funds without permission — he transferred bitcoins and ethers worth about $13 million to gambling sites.
The regulator also claims that the ezBtc platform was never registered with the agency in accordance with the Securities Act of British Columbia, and commission agreements with clients were futures contracts that also fall under the jurisdiction of the agency.
Doug Muir, head of the BCSC's Enforcement Division, added that the platform ceased to exist in October 2022. Several years ago, the site already faced lawsuits, so the agency began to investigate its activities. At the same time, Muir noted that the case is administrative, not criminal in nature. This means that even if the regulator manages to prove its case, Smilli will not face jail time, but he will have to pay an administrative fine.
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The founder of ezBtc used user funds to play at the casino
The Canadian crypto platform ezBtc and its founder David Smiley embezzled about 13 million CAD (~$9.5 million) of client funds, using part of it for gambling. This was reported by the British Columbia Securities Commission (BCSC).
The company, which folded in September 2019 and was liquidated in 2022, claimed to keep all user investments in cold storage. However, the BCSC established the fact of misappropriation of assets "for personal purposes".
According to the investigation, between 2016 and 2019, ezBtc accumulated approximately 2,300 BTC and 600 ETH. According to the regulator, Smiley redirected almost a third of users ' funds to gambling and personal needs:
"A total of 935.46 BTC and 159 ETH were transferred from ezBtc to Smiley's exchange accounts and [gambling platforms] CloudBet and FortuneJack. Transactions to the two gambling sites were sometimes made directly from ezBtc, and sometimes indirectly from ezBtc through Smiley's account, and then to the gambling sites."
The Commission also noted that ezBtc's "deception" resulted in real losses" as customers were unable to withdraw assets.
Sanctions against participants of the scheme will be introduced until September 24. These may include financial restrictions or a ban on market activity. Representatives of Smiley and ezBtc did not attend the hearing in person, but the company's founder was represented by a lawyer.
• Source: https://www.bcsc.bc.ca/-/media/PWS/...d-Orders/Decisions/2024/2024-BCSECCOM-348.pdf
According to local media, the regulator accused the creator of the BCSC, David Smillie, of organizing a multimillion-dollar securities fraud scheme. During the period from 2016 to 2019, users transferred more than 2,300 bitcoins and 600 ethers to the ezBtc platform.
Smillie assured investors that their assets were safely stored in cold storage, but the platform did not have enough reserves to cover user funds. The creator of the platform deceived his customers by using their funds without permission — he transferred bitcoins and ethers worth about $13 million to gambling sites.
The regulator also claims that the ezBtc platform was never registered with the agency in accordance with the Securities Act of British Columbia, and commission agreements with clients were futures contracts that also fall under the jurisdiction of the agency.
Doug Muir, head of the BCSC's Enforcement Division, added that the platform ceased to exist in October 2022. Several years ago, the site already faced lawsuits, so the agency began to investigate its activities. At the same time, Muir noted that the case is administrative, not criminal in nature. This means that even if the regulator manages to prove its case, Smilli will not face jail time, but he will have to pay an administrative fine.
--------
The founder of ezBtc used user funds to play at the casino
The Canadian crypto platform ezBtc and its founder David Smiley embezzled about 13 million CAD (~$9.5 million) of client funds, using part of it for gambling. This was reported by the British Columbia Securities Commission (BCSC).
The company, which folded in September 2019 and was liquidated in 2022, claimed to keep all user investments in cold storage. However, the BCSC established the fact of misappropriation of assets "for personal purposes".
According to the investigation, between 2016 and 2019, ezBtc accumulated approximately 2,300 BTC and 600 ETH. According to the regulator, Smiley redirected almost a third of users ' funds to gambling and personal needs:
"A total of 935.46 BTC and 159 ETH were transferred from ezBtc to Smiley's exchange accounts and [gambling platforms] CloudBet and FortuneJack. Transactions to the two gambling sites were sometimes made directly from ezBtc, and sometimes indirectly from ezBtc through Smiley's account, and then to the gambling sites."
The Commission also noted that ezBtc's "deception" resulted in real losses" as customers were unable to withdraw assets.
Sanctions against participants of the scheme will be introduced until September 24. These may include financial restrictions or a ban on market activity. Representatives of Smiley and ezBtc did not attend the hearing in person, but the company's founder was represented by a lawyer.
• Source: https://www.bcsc.bc.ca/-/media/PWS/...d-Orders/Decisions/2024/2024-BCSECCOM-348.pdf
