Embezzling User Funds at ezBtc
The founder of ezBtc, a Canadian cryptocurrency exchange, has been found guilty of embezzling user funds. The exchange allegedly misused customer funds for personal gain between 2016 and 2019, according to an investigation by the British Columbia Securities Commission (BCSC).
BCSC revealed that the exchange’s founder, David Smillie, diverted funds to gambling platforms like CloudBet and FortuneJack, totaling 13 million Canadian dollars. The investigation uncovered that a significant portion of user assets, including 935.46 Bitcoin and 159 Ethereum, were transferred for unauthorized purposes.
As more funds flowed from ezBtc to Smillie’s personal accounts and the gambling platforms, customers faced difficulties withdrawing their assets, leading to substantial losses.
The Impact on Customers and Regulatory Action
Many customers who deposited large sums of Bitcoin were unable to access their funds, despite promises of high investment returns. Smillie’s lack of response to customer inquiries and false assurances compounded the situation, leaving users with locked funds.
BCSC’s investigation into ezBtc was triggered by customer complaints and legal actions, culminating in findings that confirmed the exchange’s deceptive practices and resulted in significant monetary losses for users.
The regulatory body is considering imposing monetary sanctions and other restrictions on Smillie, holding him accountable for the misappropriation of user funds.
Cryptocurrency Exchange Troubles in Canada
The case of ezBtc adds to a series of cryptocurrency exchange failures in Canada, including QuadrigaCX and Einstein, which left customers in financial distress due to mismanagement and closure.
Investigations into these exchanges have revealed systemic issues such as manipulation of customer accounts, false information dissemination, and Ponzi scheme operations, raising concerns about the security and reliability of cryptocurrency trading platforms in the country.
As authorities continue to address these challenges and hold responsible parties accountable, customers are cautioned to exercise caution and due diligence when engaging with cryptocurrency exchanges to protect their investments.
