The British Columbia Securities Commission (BCSC) has accused Vancouver-based ezBtc, a non-functioning cryptocurrency platform, of defrauding investors and defrauding investors of $13 million.

According to local media, the regulator accused BCSC founder David Smillie of orchestrating a multi-million dollar securities fraud scheme. During the period from 2016 to 2019, users transferred more than 2,300 bitcoins and 600 ethers to the ezBtc platform.

Smillie assured investors that their assets were safely stored in cold storage, but the platform did not have enough reserves to cover user funds. The creator of the platform deceived his clients by using their funds without permission – he transferred bitcoins and ethers in the amount of about $ 13 million to gambling sites.

The regulator also alleges that the ezBtc platform was never registered with the agency under the BC Securities Act, and that the commission agreements with clients were futures contracts that also fall under the jurisdiction of the agency.

BCSC Head of Enforcement Doug Muir added that the platform ceased to exist in October 2022. A few years ago, the site was already faced with lawsuits, so the department began to investigate its activities. At the same time, Muir noted that the case is administrative, not criminal in nature. This means that even if the regulator manages to prove its case, Smillie will not face jail time, but he will have to pay an administrative fine.

Recall that in April, the police from the Canadian province of Alberta, together with the Chainalysis analytical company, opened the Cybercrime and Cryptocurrency Fraud Investigation Center.