In a significant development for the cryptocurrency community, the Canadian trading platform ezBtc and its founder, David Smillie, have been found guilty of defrauding customers of approximately 13 million Canadian dollars ($9.5 million). The British Columbia Securities Commission (BCSC) panel concluded that Smillie misappropriated these funds, using them for gambling rather than the promised cold storage.ezBtc, which operated from 2016 until its closure in September 2019, claimed to securely store users’ crypto investments. However, the BCSC’s investigation revealed that Smillie diverted nearly one-third of the funds—935.46 Bitcoin and 159 Ether—either directly to gambling sites such as CloudBet and FortuneJack or through Smillie’s exchange accounts.The fraud led to significant losses for customers, who were unable to access their assets. The BCSC is set to impose sanctions by September 24, which could include monetary penalties or bans on market participation. Smillie was represented by a lawyer at the hearing, but did not personally attend.The incident highlights ongoing issues with crypto adoption in Canada, which has remained low, with only 3% of the population using cryptocurrencies for everyday transactions. Canadians still prefer traditional payment methods like cash and e-transfer, reflecting a broader reluctance to fully embrace digital currencies.This case underscores the critical need for rigorous oversight in the crypto space to protect investors and maintain market integrity.
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Vaibhavv Ali is the founder and editor of Cryptonite (cryptonite.ae), an independent digital-asset news and analysis publication with a UAE focus. He covers virtual-asset regulation — VARA, ADGM and the UAE Central Bank — alongside real-world-asset tokenization, stablecoins and agentic AI in finance. Every Cryptonite article is human-edited and its sources are linked. He is also a celebrated speaker and host.
