- Canadian cryptocurrency exchange ezBtc’s founder, David Smillie, misappropriated nearly 13 million Canadian dollars (US $9.5 million) from customer funds for gambling purposes.
- During its operational period between 2016 and 2019, ezBtc claimed to store all user investments in cold wallets.
- The British Columbia Securities Commission (BCSC) found that Smillie diverted a significant portion of user funds for personal use, primarily through gambling sites.
Discover the shocking misuse of funds by ezBtc’s founder, David Smillie, impacting Canadian crypto investors deeply.
EzBtc Founder David Smillie’s Misappropriation of Funds
The Canadian cryptocurrency exchange ezBtc, founded by David Smillie, experienced a severe scandal involving the misappropriation of customer funds. British Columbia Securities Commission (BCSC) revealed that Smillie diverted nearly 13 million Canadian dollars, around 9.5 million US dollars, for gambling. This unpredictable act led to significant financial damage for countless investors.
Details Uncovered by the BCSC
BCSC’s investigation unlocked the disturbing truth behind ezBtc’s operational claims. The exchange ceased its services in September 2019 and was dissolved in 2022. During its active years, ezBtc collected over 2,300 Bitcoin and more than 600 Ethereum from investors. The BCSC panel noted that nearly a third of these funds were funneled into gambling sites like CloudBet and FortuneJack, either directly or through intermediary accounts managed by Smillie.
Impact on Investors and Market Reaction
The fraudulent activities orchestrated by Smillie not only led to massive financial losses but also triggered widespread panic among users. Many investors, unable to access their funds, expressed their frustration and despair on social media platforms. This scandal adds to the already fragile trust in crypto marketplaces, hitting Canadian cryptocurrency utilization, which has been stagnant with only 3% of the population using crypto for daily transactions.
Conclusion
The ezBtc scandal serves as a stark warning regarding the security and reliability of cryptocurrency exchanges. With substantial portions of customer funds misappropriated for personal use by its founder, the event underscores the necessity for stringent regulatory oversight. Investors are reminded to conduct thorough research and consider the associated risks before committing to cryptocurrency ventures.
