In short: Canadian cryptocurrency platform ezBtc and its founder, David Smillie, have been accused by the British Columbia Securities Commission of a securities fraud scheme and diverting $13m in customer assets to virtual gambling sites without authorization. In addition, ezBtc was never registered with the commission, and agreements with users fell under futures contracts, which are within its jurisdiction. As a result of the allegations, the involved parties may face monetary penalties or prohibitions from public markets instead of serving jail terms.
Our quick analysis:
Cryptocurrency platform ezBtc and its founder David Smillie have faced a wave of accusations from the British Columbia Securities Commission. The regulatory body alleges that the defunct platform and its founder committed a multimillion-dollar securities fraud scheme, diverting $13 million of users' assets, including BTC and ETH, to virtual gambling sites without the owners' authorization.
The accusations, unveiled in a notice of hearing issued last month, reveal that ezBtc had been moving users' assets since 2016, convincing them that their investments were being kept offline in cold storage. Unfortunately, the company never possessed enough assets to cover users' funds and used the customer assets for its schemes.
Interestingly, ezBtc was never registered with the B.C. commission, but its agreements with users fell under futures contracts, which are within the regulatory body's jurisdiction.
Furthermore, ezBtc and Smillie had faced numerous lawsuits in the past. However, the RCMP's investigation several years ago yielded insufficient evidence to pursue criminal charges.
Doug Muir, the director of enforcement at the securities commission, revealed that the case is administrative, and the parties involved may face monetary penalties or prohibitions from public markets instead of serving jail terms.
In conclusion, the accusations against ezBtc and its founder, Smillie, are grave, and the platform's users face significant losses. While the investigation is still ongoing, it is essential to remain vigilant when investing funds in cryptocurrency platforms. It is not every day that we see cryptocurrency platforms diverting customer assets to gambling sites, but ezBtc's fraud scheme shows just how risky some investments can be.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Our quick analysis:
Cryptocurrency platform ezBtc and its founder David Smillie have faced a wave of accusations from the British Columbia Securities Commission. The regulatory body alleges that the defunct platform and its founder committed a multimillion-dollar securities fraud scheme, diverting $13 million of users' assets, including BTC and ETH, to virtual gambling sites without the owners' authorization.
The accusations, unveiled in a notice of hearing issued last month, reveal that ezBtc had been moving users' assets since 2016, convincing them that their investments were being kept offline in cold storage. Unfortunately, the company never possessed enough assets to cover users' funds and used the customer assets for its schemes.
Interestingly, ezBtc was never registered with the B.C. commission, but its agreements with users fell under futures contracts, which are within the regulatory body's jurisdiction.
Furthermore, ezBtc and Smillie had faced numerous lawsuits in the past. However, the RCMP's investigation several years ago yielded insufficient evidence to pursue criminal charges.
Doug Muir, the director of enforcement at the securities commission, revealed that the case is administrative, and the parties involved may face monetary penalties or prohibitions from public markets instead of serving jail terms.
In conclusion, the accusations against ezBtc and its founder, Smillie, are grave, and the platform's users face significant losses. While the investigation is still ongoing, it is essential to remain vigilant when investing funds in cryptocurrency platforms. It is not every day that we see cryptocurrency platforms diverting customer assets to gambling sites, but ezBtc's fraud scheme shows just how risky some investments can be.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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