Summary:
David Smillie, founder of ezBtc, charged with misusing $9.5 million in customer funds.
British Columbia Securities Commission found evidence of funds diverted to gambling sites.
21.3% of Bitcoin transfers linked to Smillie’s accounts were sent to gambling sites.
Smillie’s current whereabouts are unknown as he did not attend the hearings.
Canadian Regulator Takes Action Against Crypto Exchange Founder
The British Columbia Securities Commission (BCSC) has charged David Smillie, the founder of the crypto exchange ezBtc, for allegedly misusing customer funds by gambling them away online. According to the BCSC, Smillie funneled CAD $13 million (approximately $9.48 million USD) of user assets into online gambling platforms.
The Allegations
The commission's investigation revealed that Smillie operated a fraudulent scheme, misleading customers about the trading platform while diverting their funds for personal gambling activities. The regulator found strong indicators that Smillie transferred customer funds from ezBtc to gambling sites such as FortuneJack and CloudBet.
“As more Bitcoin came into Smillie’s Exchange Accounts from ezBtc, more Bitcoin were sent from Smillie’s Exchange Accounts to the gambling sites.”
The evidence showed that the majority of the transfers to CloudBet were linked to accounts owned by either Smillie or an insider from ezBtc. Notably, over 21.3% of the Bitcoin transfers to CloudBet originated from addresses associated with Smillie’s accounts at major exchanges including Poloniex, Binance, and Kraken.
Current Status
As of now, Smillie has not appeared in hearings concerning the allegations, and his whereabouts remain unknown.
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