VANCOUVER, British Columbia, Saturday, August 24, 2024 – The founder of a Canadian cryptocurrency exchange is facing sanctions after allegedly misappropriating millions of dollars in customer funds for gambling, reports said.
The British Columbia Securities Commission (BCSC) charged that David Smillie, founder of ezBtc, diverted nearly one-third of user investments – totaling $9.5 million CAD – for personal use and gambling on websites like CloudBet and FortuneJack.
EzBtc, which ceased operations in 2019, had assured users their crypto was stored securely in cold storage.
The BCSC panel concluded that Smillie’s actions constituted a “deceit” that resulted in “actual loss” for investors, as they were unable to withdraw their funds.
Sanctions against Smillie, which could include fines and market participation bans, are expected by September 24.
The incident is seen as highlighting the challenges facing cryptocurrency adoption in Canada.
With only 3% of the population using crypto for daily transactions, Canadians favor traditional methods like cash and cards.
Even among alternative payment methods, e-transfers using email or phone numbers remain more popular. The slow adoption is likely linked to a general reluctance to move away from cash-based transactions.
