Canadian Crypto Exchange Founder Loses Millions in Gambler's Ruin

Another Day, Another Crypto Scandal

The cryptocurrency world has seen its fair share of controversies, but the recent revelation about Canadian crypto exchange ezBtc and its founder, David Smillie, is particularly egregious. According to a report by the British Columbia Securities Commission (BCSC), Smillie misappropriated a staggering $9.5 million in customer funds for his own personal use, including gambling.

A Bet Gone Wrong

ezBtc, which operated between 2016 and 2019, amassed over 2,300 Bitcoin and 600 Ether from its users. The platform claimed to store all crypto investments in cold storage, a security measure designed to protect funds. However, it turns out this was a blatant lie.

Smillie, the mastermind behind the scheme, diverted nearly one-third of user funds into his own pockets, with a significant portion used for gambling. The BCSC has labelled this as a clear case of deceit that led to substantial losses for investors.

The High Cost of Trust

This incident is a stark reminder of the risks associated with entrusting your assets to cryptocurrency exchanges. While the lure of high returns can be tempting, it's crucial to exercise extreme caution and do thorough research before choosing a platform.

It's also worth noting that peer-to-peer (P2P) trading platforms, such as Excoinz, operate differently. These platforms typically don't hold customer assets, reducing the risk of such misappropriation. Users maintain control of their crypto wallets, offering a potentially safer alternative.

As the crypto industry continues to evolve, it's essential for regulators and exchanges to work together to create a more secure environment for investors. Only then can we hope to build trust and foster long-term growth in this volatile market.