According to reports, the crypto trading platform has misled its customers with a false narrative regarding investment and safe storage of private funds. BC Securities Commission argues that the platform is actually diverting money towards gambling websites.
False claims, very real consumer pain
ezBtc, it is alleged, kept the ruse running knowingly. It displayed holdings in the usual way and allowed users to purchase certain cryptocurrencies. The regulator claims that this was all smoke and mirrors. They claim the numbers are not backed by real funds.
The agency informed the media that the money deposited had been spent in other places, including the Globe and Mail which was the original reporter. The regulator allowed ezBtc the opportunity to present its case at a meeting on 26 June. This is a chance for ezBtc, before an official hearing, to explain why it is in the wrong.
The BCSC also alleges that ezBtc violated securities laws, because its agreements with users are actually futures contracts or security. The case against ezBtc dates back many years. In November 2019, users realized the platform had been taken offline and shut down the company’s site.
The people were immediately worried when they could not perform any transactions, including withdrawals. ezBtc claimed that all holdings were in “cold-storage,” but they were now out of reach. After a thorough investigation, BCSC concluded that ezBtc didn’t store much of the user’s assets.
The Company Balance that Never Was
The regulator discovered that the money had been sent to gambling websites, but did not name them. The total amount diverted is around CA$13,000,000 ($9.61million).
ezBtc controlled 13,000 digital wallets between 2016 and 2019, totaling 2,300 Bitcoin and 60 Ether. Upon closer inspection, ezBtc had rarely more than 11 bitcoin and 20 ether on hand, meaning the funds were continuously siphoned without their users’ knowledge.
ezBtc is also down. The website’s phone number and email have stopped working. David Smillie was the only director of the company and he has been missing for several years.
