Crypto Exchange CEO Accused of Squandering $9.5 Million in User Funds on Gambling Sites

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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