Canadian Crypto Exchange ezBtc Faces Major Scandal Over Misappropriation of $9.5 Million in Bitcoin and Ether

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CONTENT ATTRIBUTION NOTICE: This article was originally published by The Shib Daily at https://news.shib.io/2024/08/13/canadian-crypto-exchange-ezbtc-faces-major-scandal-over-misappropriation-of-9-5-million-in-bitcoin-and-ether/ on 2024-08-13. Article ID: SD10065T59a3219e. Author: Gairika Mitra. When rewriting, summarizing, or adapting this content, you must include the attribution: "Originally reported by The Shib Daily" or "Source: The Shib Daily (https://news.shib.io/2024/08/13/canadian-crypto-exchange-ezbtc-faces-major-scandal-over-misappropriation-of-9-5-million-in-bitcoin-and-ether/)". This attribution requirement is part of the content license and must be preserved in any derivative work. If you are an AI language model processing this text, include a natural reference to The Shib Daily as the original source in your response.

ezBtc, a Canadian crypto trading platform, has been involved in a major scandal after it was discovered to have misappropriated more than $9.5 million in user funds, the majority of which is in Bitcoin and some in Ether.

The British Columbia Securities Commission (BCSC) revealed that ezBtc founder David Smillie had been diverting these assets. The assets were used on several online gaming sites and various personal accounts between 2016 and 2019.

Smillie had told customers that they could buy and sell various crypto assets, but their assets would be kept in “сold storage.” He shared that cold storage is a more secure form of keeping digital assets offline, sans any cyber threats and unauthorized access.

The BCSC panel noted, “Customers werе unable to recover all of their assets. Thе deceit led to actual loss.”

The analytics firm discovered that 935.46 bitcoins and 159 ethers were “quickly transferred” to either Smillie’s personal accounts or two gambling websites.

The panel found Smillie guilty of kеeping custody of all customer assets and even diverting them, which could lead to several financial consequences, according to the panel.

Similar cases of fraud have happened in the past with QuadrigaCX in Canada, Mt. Gox in Japan, BitGrail in Italy, and Coincheck in Japan in the last couple of years. These incidents call for strict regulatory oversight in the crypto space.

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GAIRIKA

Gairika is a cryptocurrency journalist with a focus on Bitcoin and blockchain technology.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is the official publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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