In the latest news in cryptocurrency, a Canadian crypto platform is accused of siphoning off millions in customer funds for a high-stakes gambling spree.
The Canadian cryptocurrency exchange ezBtc and its founder, David Smillie, have been exposed for defrauding customers by misappropriating around 13 million Canadian dollars (approximately $9.5 million USD) in cryptocurrency investments. According to trending crypto news, instead of safeguarding these funds, Smillie used them for gambling.
A panel from the British Columbia Securities Commission (BCSC), a provincial regulator, revealed that ezBtc had misappropriated customer assets for personal use. The platform, which went offline permanently around September 2019 and was dissolved in 2022, had previously assured users that their crypto investments were safely stored in cold storage.
During its operational years from 2016 to 2019, ezBtc accumulated over 2,300 Bitcoin and more than 600 Ether from investors. However, the BCSC panel found that nearly one-third of these funds—specifically 935.46 Bitcoin and 159 Ether—were diverted by Smillie to gambling sites like CloudBet and FortuneJack, either directly from ezBtc or through his exchange accounts.
The panel also highlighted that this deceitful activity resulted in real financial losses for customers who could not withdraw their assets. Smillie did not attend the hearing in person, but his lawyer represented him.
Meanwhile, cryptocurrency adoption in Canada has seen little growth over the past two years, with only 3% of the population using Bitcoin or other cryptocurrencies for everyday payments.
Canadians continue to favor cash and card payments, and among other payment methods, e-transfer, which uses email addresses or phone numbers to transfer money, remains the most popular alternative. The primary reason for the slow uptake of cryptocurrencies in Canada is a general hesitance to embrace cashless transactions.
