The Canadian cryptocurrency trading platform ezBtc, together with the founder David Smillie, faces severe charges of misappropriating a sum of 13 million Canadian dollars or equivalent $9.5 million of user funds for personal use, including gambling. The panel of the British Columbia Securities Commission (BCSC) is the one that brings these allegations to the surface, as it is the fiscal arbiter of the region.
The Rise and Fall of ezBtc
It was in 2016 that the company was founded so it did not take long for ezBtc to become the leading cryptocurrency provider in Canada after it attracted a lot of the country’s citizens to invest in its ventures. In the course of the years, the platform increased to a total of more than 2300 Bitcoins and 600 Ether from its users who were guaranteed cold storage security.
Nevertheless, user complaints started to come in late September 2019 with reports of EZBtc suddenly going offline and leaving them with no recourse to their assets.
By the year 2022, the platform was officially done but the question of the missing funds continues to puzzle the people.
BCSC Investigation Reveals Shocking Misuse of Funds
Smillie’s diversion of 32% of the customer’s funds for gambling and personal expenses was discovered as a result of BCSC’s inquiry. It was learned through the study that 935.46 of Bitcoin and 159 of Ether were moved from ezBtc into Smillie’s personal exchange accounts or pouted into the mentioned online gambling platforms brand such as CloudBet and FortuneJack. The investigators managed to disclose additional data concerning that some of the transfers were siphoned out of ezBtc accounts, and others were gone through Smillie’s personal accounts first before the money was used for gambling.
The Article that EZBtc’s tech team could help putting up the gambling sites themselves to avoid faster and secure transactions was partly possible because occasionally transactions were done directly from EZBtc or David Smillie’s exchange accounts to the gambling sites. The report of the BCSC pointed a treachery led to substantial monetary losses of the clients of ezBtc, who were prevented from withdrawing their assets.
Consequences and Broader Implications for Crypto in Canada
The BCSC is expected to announce the sanctions against David Smillie and ezBtc by September 24, 2024. Such may be the case of hefty financial penalties or even bans to future market participation. In the absence of Mr. Smillie, the authorized person of his lawyer was present at the hearing to represent Smillie.
The timing of this scandal is when the Canadian marketplace is displaying a troubled patch in cryptocurrency adoption. Despite the almost universal acceptance of the technology everywhere, the rate of Canadian cryptocurrency adoption is still relatively low. As a means of payment, most people in Canada prefer more conventional systems such as cash, cards or e-transfers and Bitcoin is not very popular in the society.
