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A Canadian regulator has accused crypto trading platform ezBtc and its founder, David Smillie, of misappropriating customer funds. Grayscale’s Ethereum Trust has posted its first day of non-outflows, 14 trading days after it launched. Meanwhile, Argo Blockchain has fully repaid a $35 million loan from Galaxy Digital, which prevented its bankruptcy when the crypto bear market hit the Bitcoin miner in 2022.
Canadian crypto exchange gambled away $9.5 million of users’ Bitcoin and Ether
The Canadian cryptocurrency trading platform ezBtc and its founder, David Smillie, defrauded customers by misappropriating approximately 13 million Canadian dollars ($9.5 million) of their cryptocurrency investments and using the funds for gambling.
A panel set by the British Columbia Securities Commission (BCSC), a provincial regulator in Canada, found that ezBtc misappropriated customer funds “for their own purposes.”
The ezBtc platform, which went offline permanently in or around September 2019 and was dissolved in 2022, had claimed to store all its users’ crypto investments in cold storage.
During its time of operation, between 2016 and 2019, ezBtc amassed over 2,300 Bitcoin (BTC) and over 600 Ether (ETH) from crypto investors.
According to the BCSC panel, Smillie diverted nearly one-third of users’ funds for gambling and personal use:
“We find that in aggregate, 935.46 Bitcoin and 159 Ether were transferred by ezBtc to Smillie’s exchange accounts and/or to CloudBet and FortuneJack. The transfers to the two gambling websites were sometimes direct from ezBtc, and sometimes indirect from ezBtc to Smillie’s exchange accounts and then to the gambling websites.”
According to the court filing, sanctions will be imposed by Sept. 24, and they could range from monetary sanctions to bans on market participation.
Grayscale ETH ETF stops bleeding after 14 days of outflow
The Grayscale Ethereum Trust (ETHE) has posted its first day of zero outflows, ending a consecutive daily onslaught of outflows since its launch.
On Aug. 12, Ether exchange-traded fund (ETF) flows flipped positive for the fifth time since their launch on July 23, aided by ETHE posting its first day of zero outflows, per Farside data.
In total, ETHE has hemorrhaged nearly $2.3 billion in Ether in the 20 days since its launch.
In comparison, Grayscale’s Bitcoin Trust (GBTC) took close to four months before it saw its first day of non-outflow.
Bitcoin miner Argo repays $35 million Galaxy bailout loan
Bitcoin miner Argo Blockchain has successfully repaid a $35 million loan to Galaxy Digital, borrowed in 2022 to avoid bankruptcy during the crypto bear market. The loan was part of a broader agreement that included selling Argo’s Helios Bitcoin mining facility in Texas to Galaxy Digital for $65 million and refinancing its debt.
The loan was collateralized by Argo’s “23,619 Bitmain S19J Pro mining machines currently operating at Helios and certain machines located at Argo’s Canadian data centers,” Argo said. As part of the deal, Argo agreed to lease back space in Helios to keep running its Bitcoin mining equipment.
Argo had a hashrate of 2.7 exahashes per second (EH/s) as of the end of 2023. The total hashrate for the Bitcoin network is currently 677.43 EH/s, according to data from CoinWarz. In July, Argo mined 48 BTC, or 1.5 BTC per day on average, the company announced.
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