Crypto Founder Faces Charges for Gambling Away Users' $9.5M Funds

The British Columbia Securities Commission (BCSC) has accused the founder of cryptocurrency exchange ezBtc, David Smillie, of using customer funds for gambling. According to the regulator, Smillie used C$13 million, or about $9.5 million, of customers' cryptocurrency assets to bet online.

The investigation revealed that Smillie engaged in a fraudulent scheme, deceiving clients about managing a cryptocurrency exchange and diverting their funds for personal use. He was found to have transferred customer funds to gambling sites FortuneJack and CloudBet.

Regulators discovered that the accounts on these platforms were registered to an employee of ezBtc or Smillie himself. The commission emphasized that the use of client funds for gambling is a gross violation of securities laws and endangers trust in financial markets.