Crypto Exchange exBtc Founder David Smillie Accused of Using Customer Funds to Gamble Online
The founder of a Canadian cryptocurrency exchange, ezBtc, is alleged to have gambled CAD $13 million ($9.48 million) of customer funds at online casinos.
The British Columbia Securities Commission has charged David Smillie with the crime.
The complaint alleged the following:
“The respondents perpetrated a fraudulent scheme relating to securities by lying to customers about a crypto asset trading platform the respondents claimed to operate and by diverting approximately $13 million in customer assets for their own purposes.”
Investigators determined that much of the funds were gambled away at crypto gambling sites CloudBet and FortuneJack.
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It's not immediately clear if either site is cooperating in the probe.
“As more Bitcoin came into Smillie’s Exchange Accounts from ezBtc, more Bitcoin were sent from Smillie’s Exchange Accounts to the gambling sites. This is a strong indication that Smillie used funds from ezBtc to fund his accounts at those gambling sites.
“The majority of ezBtc’s transfers to CloudBet were to CloudBet accounts belonging to Smillie or an ezBtc insider. Over 21.3% of bitcoin transfers from ezBtc to CloudBet were made to CloudBet deposit addresses that also received bitcoin from Smillie’s accounts at Poloniex, Binance and Kraken.”
The platform went offline in 2019 and was dissolved in 2022.
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