David Smillie, founder of Canadian crypto exchange ezBtc, defrauded users of $9.5M in Bitcoin and Ether for personal use and gambling, leading to significant investor losses.
In a shocking revelation, the British Columbia Securities Commission (BCSC) has uncovered that David Smillie, founder of the now-defunct Canadian crypto exchange ezBtc, misappropriated nearly $9.5 million worth of Bitcoin and Ether from customer accounts. The funds were reportedly diverted for personal use and gambling, leaving many investors unable to retrieve their assets. This scandal highlights the risks associated with unregulated crypto platforms and the importance of due diligence in the cryptocurrency space.
Key Points:
Fraudulent Activity: David Smillie misappropriated approximately 935 Bitcoin and 159 Ether from ezBtc user accounts, using the funds for gambling and personal purposes.
Platform Closure: EzBtc, which operated between 2016 and 2019, claimed to store user assets in cold storage but went offline in 2019 and was dissolved in 2022.
Regulatory Action: The BCSC has deemed ezBtc's actions as fraudulent, leading to investor losses, with sanctions against Smillie to be decided by September 24.
Impact on Investors: Customers of ezBtc were left without access to their funds, highlighting the dangers of trusting unregulated crypto exchanges.
Crypto Adoption in Canada: Despite this incident, crypto adoption in Canada remains low, with only 3% of the population using cryptocurrencies for daily transactions.
Related: Ethereum and DeFi: The Emerging Powerhouses of the Crypto Market, Says Michaël van de Poppe
The ezBtc scandal serves as a cautionary tale for cryptocurrency investors, underscoring the importance of regulatory oversight and the risks of dealing with unregulated exchanges. As the Canadian authorities prepare to impose sanctions on David Smillie, the incident also reflects the slow pace of crypto adoption in the country, with Canadians continuing to favor traditional payment methods.
Source: Cointelegraph
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