The founder of ezBtc funnelled $13M of customer crypto into personal gambling

ezBtc was a British Columbia cryptocurrency trading platform that held customers' digital assets in custody. Through its chief executive and founder David Smillie, the company took in Bitcoin and Ethereum from customers who expected the assets to be held safely and returned on request.

Instead, between 2016 and 2024 Smillie diverted 935.46 Bitcoin and 159 Ethereum belonging to ezBtc customers — worth roughly $13 million, about a third of the platform's assets — into online gambling and personal spending. Customers who asked to withdraw their crypto found it gone.

The British Columbia Securities Commission (BCSC) investigated and found the funds had been misappropriated. In December 2024 it imposed sanctions totalling about $18.4 million, comprising roughly $10.4 million in restitution to harmed customers and an $8 million administrative penalty.

Smillie was permanently banned from participating in the securities and crypto markets in British Columbia. The case became a cautionary example of the custodial risk that was endemic to lightly regulated crypto exchanges that held customer funds alongside operator access.