Bitcoin

The Canadian cryptocurrency trading platform ezBtc and its founder, David Smillie, have been found guilty of defrauding customers by misappropriating approximately 13 million Canadian dollars ($9.5 million) of their cryptocurrency investments, using the funds for personal gambling activities.
A panel established by the British Columbia Securities Commission (BCSC), a provincial regulator in Canada, concluded that ezBtc had misused customer funds “for their own purposes.” The platform, which ceased operations permanently around September 2019 and was dissolved in 2022, had claimed that all user crypto investments were securely stored in cold storage.
During its operation between 2016 and 2019, ezBtc collected over 2,300 Bitcoin (BTC) and more than 600 Ether (ETH) from investors. However, the BCSC panel revealed that Smillie diverted a significant portion of these funds for personal use and gambling.
“We find that in aggregate, 935.46 Bitcoin and 159 Ether were transferred by ezBtc to Smillie’s exchange accounts and/or to CloudBet and FortuneJack,” the panel reported. “The transfers to the two gambling websites were sometimes direct from ezBtc, and sometimes indirect from ezBtc to Smillie’s exchange accounts and then to the gambling websites.”
The panel highlighted that the “deceit” orchestrated by Smillie and ezBtc resulted in actual losses, as customers were unable to withdraw their assets.
Sanctions against Smillie are expected to be imposed by September 24, with potential penalties ranging from monetary fines to bans on market participation.
Despite the gravity of the charges, neither Smillie nor ezBtc representatives attended the hearing in person, although Smillie was represented by a lawyer.
In the broader context, cryptocurrency adoption in Canada has remained sluggish, with only 3% of the population using Bitcoin or other cryptocurrencies for daily transactions. Canadians have shown a strong preference for traditional payment methods like cash and cards, and among alternative payment methods, e-transfer remains the most popular. The slow adoption of cryptocurrency in Canada is largely attributed to a general reluctance to move away from cash-based transactions.

Crypto Platform Found Guilty of Gambling With Users’ Funds

Crypto Intelligence

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