Canadian cryptocurrency trading platform ezBtc and its founder, David Smillie, are accused of embezzling approximately 13 million Canadian dollars (equivalent to 9.5 million U.S. dollars) from their customers. These funds, which came from cryptocurrency investments, were used for personal purposes, including gambling, according to an investigative panel of the British Columbia Securities Commission (BCSC).
Customer funds misused
The BCSC, a provincial regulator in Canada, has determined that ezBtc misused customer funds. The platform, which went offline for good in or around September 2019 and was dissolved in 2022, initially claimed that all of its users’ crypto investments were safely stored in cold storage.
During ezBtc’s active period, between 2016 and 2019, the platform collected over 2,300 Bitcoin and over 600 Ethereum from investors. However, the investigation found that 935.46 Bitcoin and 159 Ethereum were diverted for personal use, including gambling. These funds were transferred to Smillie’s exchange accounts and to gambling websites such as CloudBet and FortuneJack, according to the BCSC panel.
The panel concluded that the “fraud” committed by Smillie and ezBtc resulted in significant losses for customers, who were unable to withdraw their assets. Sanctions ranging from financial penalties to market bans will be imposed on September 24.
Smillie and representatives of ezBtc were not present in person at the hearing, but Smillie was represented by an attorney.
Crypto adoption stagnates in Canada
Meanwhile, cryptocurrency adoption in Canada has been stagnant for over 2 years, with only 3% of the population using Bitcoin or other cryptocurrencies for everyday payments. Canadians still prefer cash and card payments. Among the various alternatives to cash and cards, e-transfer, which involves transferring money via email addresses or phone numbers, is the most popular.
The slow adoption of cryptocurrency in Canada is mainly attributed to the general reluctance of the population to fully switch to digital payments.
Source: https://newsbit.nl/canadees-cryptoplatform-ezbtc-en-oprichter-beschuldigd-van-grootschalige-fraude/
