Securities Commission alleges fraud committed by B.C. crypto firm

The B.C. Securities Commission says a now-defunct cryptocurrency platform based in Nanaimo on Vancouver Island committed a multimillion dollar securities fraud involving various digital currencies. An advertisement for bitcoin, one of the cryptocurrencies, is displayed on a building in Hong Kong, on Nov. 18, 2021. THE CANADIAN PRESS/AP-Kin Cheung Copyright 2021 The Associated Press. All rights reserved

By The Canadian Press

Posted May 2, 2023 2:10 pm.

Last Updated May 2, 2023 6:17 pm.

The B.C. Securities Commission says a now-defunct cryptocurrency platform based in Nanaimo on Vancouver Island committed a multimillion-dollar securities fraud involving various digital currencies.

In a notice of hearing issued last month, the commission says David Smillie and his numbered company, which did business as ezBtc, lied to customers about its crypto asset trading platform.

The commission says Smillie and the company diverted about $13 million worth of bitcoin and ether, another cryptocurrency, to two online gambling sites without authorization.

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The regulator says the company was dissolved in October 2022, but between 2016 and 2019 customers transferred 2,300 bitcoin and 600 ether tokens into wallets hosted by the platform.

The securities commission says Smillie and the firm told customers their digital assets were mostly held offline in so-called “cold storage,” but they never truly maintained enough to cover users’ assets.

The commission says Smillie and his company must attend its offices in downtown Vancouver on June 27 to fix a date for a hearing into the regulator’s allegations.

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