BC Securities Commission wraps hearing on $13m alleged crypto fraud

The now defunct Nanaimo-based cryptocurrency exchange was the target of a massive investigation in British Columbia, Canada

The case involves ezBtc, a platform owned by David Smillie, who was its own sole director, and who misused investors’ funds, syphoning off an estimated $13 million into various gambling websites.

ezBtc asked customers to open an account, deposit crypto assets such as Bitcoin or Ether and trade cryptocurrencies. According to the watchdog, an estimated 2,300 Bitcoin and more than 600 Ether tokens were traded on the platform between 2016 and 2019 before it was shut down.

Smillie is still missing, and he has not attended the hearing with the man’s location not currently known. The BC Securities Commission established the facts of the alleged fraud, arguing that the funds held on ezBtc were transferred to two online crypto-gambling websites at the request of Smillie.

The regulator also called bogus the claim that 99% of the users’ funds were in cold storage, meaning offline and disconnected hard drives or other devices to prevent them from becoming a target of hacking events. However, further investigation showed that the alleged cold storage holdings were not there and that the platform didn’t have a balance that exceeded 11 bitcoin and 20 Ether between the time of its operations.

Customers were mostly unable to withdraw their holdings, especially in cases exceeding these balances. Although the commission has closed its disciplinary hearing, it now allows for lawyers to make further submissions until May 17. To clarify, Smillie is not found guilty of any wrongdoing just yet, although the investigation points to his guilt.

The BC Securities Commission will have 120 days to pronounce a verdict following the May 17 deadline.

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Written by Barney

Co-founder

Barney is co-founder of CryptoGamblingNews.com. When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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