Canadian Crypto Exchange Founder Caught Gambling with $9.5M of User Funds
Key Takeaways David Smillie, founder of ezBtc, is accused of misappropriating $9.5 million of user investments for gambling; The BCSC investigation revealed that nearly one-third of the funds collected by ezBtc were diverted by Smillie for personal and gambling use, with customers unable to withdraw; Legal actions against Smillie and ezBtc are expected to be finalized by September 24.
David Smillie, the founder of Canadian crypto exchange ezBtc, has been accused of misappropriating around 13 million Canadian dollars ($9.5 million) of user investments for gambling.
This accusation derives from an investigation conducted by the British Columbia Securities Commission (BCSC), a regulator in the Canadian province of British Columbia.
EzBtc had assured users that their crypto investments were securely stored in cold storage. However, the reality was different. The platform, operational from 2016 to 2019, collected over 2,300 Bitcoin and more than 600 Ether from its investors.
The BCSC found that nearly one-third of these funds were redirected by Smillie for gambling and personal use. The court filing states:
We find that in aggregate, 935.46 Bitcoin and 159 Ether were transferred by ezBtc to Smillie's Exchange Accounts, and/or to CloudBet and FortuneJack. The transfers to the two gambling websites were sometimes direct from ezBtc, and sometimes indirect from ezBtc to Smillie's Exchange Accounts and then to the gambling websites.
As a result, customers were unable to access or withdraw their funds, leading to significant financial losses.
Legal actions and potential sanctions against Smillie and ezBtc are expected to be finalized by September 24, possibly including financial penalties and market participation bans.
This case highlights the risks involved in crypto investments and the importance of regulatory oversight to protect investors from fraud.
In other news, in May, Cypher's developer publicly admitted to gambling away over $300,000 from the protocol's redemption contract.
Gode is a mutilingual professional, having studied in multiple universities all across Europe. This allows her to have a one-of-a-kind opportunity to analyze Web3 social sentiments spanning different cultures and languages and, in turn, develop a much deeper understanding of how the Web3 space is growing within different communities. With the rest of her team, Gode works to identify crucial crypto news patterns and provide unbiased and data-driven information.
Gode’s passions include working and communicating with people, and when she’s not researching Web3 news, she spends her time traveling and watching true crime documentaries.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
SEC greenlights listing and trading options for BlackRock's spot bitcoin ETF
The SEC approved spot bitcoin ETFs earlier this year, but had not yet approved listing and trading for options on those products.
Securitize adds Wormhole for multi-chain RWA tokens
Telegram May Face India Ban After Hacker Exploits Chatbots to Leak Insurer Data
Celestia Price Prediction in 2024: October November December, GoodEgg Remains Dominate Altcoin
Trending news
MoreCrypto prices
More
