Title : B.C. cryptocurrency exchange faces 6 lawsuits, 'dozens' of unpaid users
link : B.C. cryptocurrency exchange faces 6 lawsuits, 'dozens' of unpaid users
B.C. cryptocurrency exchange faces 6 lawsuits, 'dozens' of unpaid users
A Vancouver Island cryptocurrency exchange has been the subject of six lawsuits over the last two years, and users of the platform tell CTV News those cases are the tip of the iceberg.
Ottawa resident Rob Johnston deposited Bitcoin in his account with Nanaimo-based ezBtc.ca in August 2018. After selling the cryptocurrency for Canadian dollars on the platform, he requested a cheque withdrawal in the amount of $2,633.18. Nearly a year later, after numerous communications with the company, he still hasn't been paid.
Johnston isn't alone. A search for ezBtc on social media yields numerous posts from disgruntled users who say they haven't received the payments they requested. Reviews of the company on Better Business Bureau and on Google describe problems similar to those Johnston has had.
A pattern of non-payment
Johnston said he has been in contact with at least three dozen people who have been unable to withdraw their money from ezBtc. While CTV News could not independently confirm this number of complaints, reviewing various social media platforms yields a conservative estimate of at least 12 unique individuals posting about unreceived withdrawals from ezBtc.
"It does follow a pattern," Johnston said. "Things started to disintegrate sometime starting June or July last year … Money wasn't coming out, or was trickling out, and then it just stopped. And then they call support and then they get the runaround, constant excuses, phone calls with kind of incoherent explanations, promises that payment is coming. Nothing happens."
EzBtc bills itself as "Canada's fastest Bitcoin and Altcoin exchange." The company's homepage features a list of 20 of the most-traded "Altcoins" -- a type of cryptocurrency -- plus a link to a list of all the various cryptocurrencies that can be purchased through the platform.
In theory, ezBtc functions in essentially the same way as a brokerage account. Users can make deposits from their bank accounts, as well as from their cryptocurrency wallets, and use the funds deposited to purchase a portfolio of cryptocurrencies.
Unlike traditional banks, however, cryptocurrency exchanges like ezBtc are not covered by securities laws. Deposits are not insured, and securities regulators are limited in their ability to police such organizations.
The search for a legal remedy
One ezBtc customer who asked not to be named in this story told CTV News that his complaint about the company to the B.C. Securities Commission went nowhere.
While the BCSC does not comment on whether it has received complaints about specific businesses or individuals, the commission told CTV News that its mandate is limited to the regulation of securities and derivatives.
"A cryptocurrency platform, depending on how they operate and the crypto-assets they make available for trading, may be subject to securities regulation," BCSC said in an email, but it added that, "To date, no cryptocurrency exchange has been recognized as a marketplace by Canadian securities regulators."
In June, The Canadian Securities Administrators, of which BCSC is a member, published an investor alert urging Canadians to be cautious when purchasing cryptocurrencies, noting that the presence of the word "exchange" in a company's name or literature does not make that company subject to securities regulations.
Efforts to go through police have also not been fruitful. Johnston said he spoke with an officer from Nanaimo RCMP about ezBtc for a potential fraud investigation, but a spokesman for the detachment told CTV News its investigators had concluded that the evidence in the case "did not meet the threshold of criminality."
While new evidence could prompt the RCMP to reopen its investigation, the spokesman said, for now, Mounties consider disputes between ezBtc and its customers to be a civil matter.
Johnston told CTV News he has been trying to get his money back through B.C.'s Civil Resolution Tribunal, an online process for claims less than $5,000.
Six lawsuits in progress
A total of six lawsuits have been filed against ezBtc, four of them in small claims and two in B.C. Supreme Court.
The small claims plaintiffs all seek payment from the company, claiming that withdrawals were either partially paid or not paid at all.
In one case, the company paid Gary Wylon Wong most of the more than $170,000 he attempted to withdraw in three installments between February and June 2018. Wong sued ezBtc to recover roughly $20,000 that he claims remains outstanding.
In another case, John Patric Arthur Roberts claims that ezBtc has not paid any of the $5,392.50 he attempted to withdraw from his account in August 2018.
EzBtc does not appear to have replied to either of these cases.
The two Supreme Court cases involve associates of ezBtc who were asked to lend Bitcoin to the company or its founder and president David Smillie.
Richard Godwin, of Whistler, claims he lent the company and Smillie more than 173 Bitcoin -- an amount currently worth more than $2 million -- in October 2016 and has not been repaid. Godwin's lawsuit alleges that, with interest, he is now owed more than 284 Bitcoin -- the equivalent of $3.8 million.
In his response to Godwin's lawsuit, Smillie and ezBtc deny all of the allegations against them, arguing that the company fulfilled all of its obligations to Godwin. They also allege that the loan agreement charged an illegally high interest rate, amounting to 130 per cent per year.
The plaintiff in the other lawsuit is Joseph Goldlust, who court documents say was hired as ezBtc's director of operations in July 2018. According to the documents, Goldlust loaned Smillie 1.5 Bitcoin that month, and was repaid with interest a few days later.
After that initial loan, Goldlust's lawsuit alleges, Smillie requested three additional loans worth a total of 13 bitcoins, only 0.3 of which had been repaid as of September 2018. Between principal and interest, Smillie owes Goldlust more than $150,000, according to court filings.
Neither Smillie nor ezBtc appear to have responded to Goldlust's suit.
'Get him to stop'
Compared to the many thousands of dollars some ezBtc customers say they are owed, Johnston's outstanding amount is quite small. He told CTV News the lower amount he is seeking makes him feel like he has less to lose in confronting ezBtc online.
"The other people who are owed tens of thousands, they're a bit more timid," Johnston said. "They don't want to rock the boat too much."
Smillie, who previously worked as a video editor for CTV News between 2001 and 2010, has sometimes responded to complaints on the company's social media accounts, signing his posts "Dave." Other responses are unsigned, so it's unclear whether they come from Smillie or someone else at the company. In any case, the company's social media accounts tend to refer first-time complainants to customer support. Repeat complainants tend to be ignored or blocked.
Smillie has not responded to a request for comment from CTV News.
If he can't get his money back through the Civil Resolution Tribunal, Johnston said, he hopes something can be done to prevent other users from losing their money through ezBtc. Ideally, he would like to see Smillie forced to shutter the business.
"The first thing that everybody wants is to have their own money back, and that's what I would want to," Johnston said. "A lot of us think that there isn't any money to have, so second place would be to get him to stop."
None of the allegations have been tested in court.
Thus Article B.C. cryptocurrency exchange faces 6 lawsuits, 'dozens' of unpaid users
You are now reading the article B.C. cryptocurrency exchange faces 6 lawsuits, 'dozens' of unpaid users with the link address https://coneknews.blogspot.com/2019/07/bc-cryptocurrency-exchange-faces-6.html
0 Response to "B.C. cryptocurrency exchange faces 6 lawsuits, 'dozens' of unpaid users"
Post a Comment