A shocking revelation has emerged from Canada’s cryptocurrency scene, as the now-defunct trading platform ezBtc and its founder, David Smillie, have been found guilty of misappropriating approximately $9.5 million (13 million CAD) of users’ cryptocurrency. According to the British Columbia Securities Commission (BCSC), the funds were diverted for personal use, including gambling.
The ezBtc platform, which operated between 2016 and 2019, claimed to securely store users’ crypto assets in cold storage. However, it was revealed that during its operation, the platform amassed over 2,300 Bitcoin and 600 Ether from investors. Shockingly, nearly one-third of these funds—935.46 Bitcoin and 159 Ether—were redirected by Smillie for personal gains, including transactions with gambling websites such as CloudBet and FortuneJack.
The BCSC panel condemned the actions of Smillie and ezBtc, emphasizing the deceit involved, which resulted in significant financial losses for customers who were unable to withdraw their assets. The platform went offline in September 2019 and was officially dissolved in 2022.
Sanctions against Smillie and ezBtc are expected to be determined by September 24, with potential consequences including hefty fines and market participation bans. Despite the gravity of the situation, Smillie did not attend the hearing, opting instead to be represented by a lawyer.
This scandal unfolds against a backdrop of sluggish crypto adoption in Canada, where only 3% of the population uses cryptocurrencies for daily transactions. The country remains predominantly reliant on cash and card payments, with e-transfer being the preferred digital alternative. The reluctance to embrace cashless transactions has contributed to the slow growth of cryptocurrency adoption in Canada.
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