Founder of crypto exchange loses millions gambling

The founder of a now-closed crypto exchange embezzled the equivalent of several million euros in gambling. At least that is the result of an investigation report by the Canadian Securities and Exchange Commission. But how was the crypto founder able to embezzle such a large amount of money from gambling over a long period of time?

Just a few years ago, the crypto exchange ezBtc was very popular with international investors. What nobody knew at the time was that the founder of the crypto exchange, David Smillie, had embezzled a total of around CAD 13 million between 2016 and 2019. This corresponds to around 8.6 million euros. As recently as June last year, we at GambleJoe reported that the British Finance Committee wanted to regulate crypto trading as gambling.

Founder of crypto exchange helped himself to customers' assets

The ezBtc case left investors around the world speechless. Over a period of several years, the founder of the crypto exchange helped himself to his customers' assets. In total, over 900 Bitcoin and around 150 Ether disappeared. The equivalent value: around 13 million CAD or 8.6 million euros. In some cases, investors' deposits disappeared again just a few minutes after the successful transaction.

A few weeks ago, the Securities and Exchange Commission of British Columbia, a province in Canada, published a corresponding investigation report. According to the report, the founder of the crypto exchange transferred the assets either to his own account or to online casinos such as FortuneJack or CloudBet. Smillie then lost a considerable amount of money in online gambling. Just a few weeks ago, we asked ourselves in an article published on GambleJoe whether it could soon be possible to deposit with Bitcoin in German online casinos.

Crypto platform promises interest rate of 9%

David Smillie has collected large amounts of crypto assets from investors for his crypto exchange within a short space of time. Customers were obviously eager to deposit with ezBtc, as according to the crypto magazine Dailycoin, a 9% interest rate was promised on the balance. It is still not clear how the founder of the crypto exchange could have generated such high interest rates. It is therefore not unlikely that Smillie tried to increase his customers' money by gambling online in order to be able to pay out the promised interest. Logically, this attempt failed.

It is equally likely that the crypto founder himself was addicted to gambling and therefore gambled away his customers' assets. In a somewhat older guide at GambleJoe, we already tried to answer the question of how gambling addiction can be recognised and effectively combated.

In any case, the former CEO of the crypto exchange currently has to answer for his actions in a Canadian court. He is facing a fine or prison sentence. In addition, the defendant is to be banned from participating in the market completely. The verdict is scheduled for 24 September at the latest. It is unclear whether the investors have been compensated in the meantime and have received at least some of their crypto assets back.

Image source: https://pixabay.com/de/photos/handel-block-kette-kryptowährung-6531134/