It was the bitcoin boom of 2017. I was a novice to the crypto scene and like many I was incredibly excited by what block-chain technology had to offer, in both financial and technological terms. There was ferocious hype in the air, people were going wild and bitcoin was steadily rising like a titan. 

Like much of the flock at that time, I decided to find a way of buying into the crypto market. I signed up to several sites, but it took forever to get approved. There were not many ways that Canadians could buy BTC at that time because most of the exchanges catered to the US or European countries.

But I was dead-set to find a decent home brewed and crafted Canadian site where I could get some crypto. So I found a "reputable" Canadian exchange and submitted an application through QuadrigaCX  which looked pretty good at the time (don't ask what happened with Quadriga), though to my dismay it took forever to get approval and the fees were extortionate.

After that, I came across a centralized Canadian exchange called Ezbtc.ca (enter heavenly harp music here), where people said the approval goes through at lightning speed and that it was “legit, eh". I signed up, and wham, I got approved and quickly dashed to bet on the raging Bitcoin bull via my EZBTC account.

I bought various coins that were available there for a less exorbitant fee, and I had little trouble sending them to other exchanges, or to my private wallets, during this period. Happy days.

Holding, arbitrage and polar bears

Fast-forward to January 2019. The crypto world was now in a frail, miasmic, polar bear market, still wafting a ghostly cry - which felt like a good time to cost-average my crypto from the hit I took since my initial purchase in 2017 at the height of all the rage.

With a little research, I found some niches to exploit in the market. Arbitrage was the plan: taking advantage of the low cost of crypto on one cryptocurrency exchange and selling for a higher price on another exchange. Aarrr, ‘tis a golden opportunity, matey... or so I thought.

I started off with larger exchanges where the profits were small, but then noticed a hefty opportunity which would require buying from a large exchange and then selling it on EZBTC at a much-inflated price.

I ended up selling thousands of dollars worth of BTC on ezbtc.ca thinking it would be an easy home-run, since I had reasonably quick service taking my coins off the exchange in the past, with only the occasional hiccup. I thought getting fiat should be a no-brainer... and then the system began to stall.

I sent messages to customer service dozens of times over a period of time that went from weeks to months, ultimately getting assurance from them that they would prioritise my withdrawal requests - once they resolved some issues with a bank that had apparently barred them. A huge red flag flared in my mind, and I just hoped that the problem would be over soon.

The CEO David Smillie began posting announcements that there were issues accessing the keys to the crypto in cold storage and that they were working around the clock to access them. Time passed, nothing had changed, and eventually new accounts were barred from signing up. I learned that there were dozens of people (at least) in the same situation, waiting for months for a miracle to happen. I kept on calling and messaging the site daily, hoping to retrieve something, but customer service just had the same narrative, apologising in rote manner as they had in the past. 

Eventually I managed to talk with Smillie himself, who told me they were working through "technical issues", and that at least some repayment plan would begin within a week. But weeks and then months of radio silence passed. The site then shut down entirely, Smilie deleted his Facebook account, and the phone number and email address for customer service went completely AWOL.

I ultimately learned that Smillie had been sued by debtors in the past and that he defrauded dozens if not hundreds of people out of millions of dollars. Smillie apparently used the ill-gotten funds to soak his appetite for gambling and drug benders. Rumour had it that he was detained by police in B.C. and that upon his release he fled the country - possibly to his wife's native country of Lithuania.

An online group has been established in the hope of finding him and bringing him to justice, no matter what identity he may be presently using for cover. (A photo of him appears below)

They say that the five stages of grief are denial, anger, bargaining, depression, and acceptance. These are the emotions that I deal with every time I think of this story, and I have decided to write it up as a huge life lesson. I hope I can help others to realize the gravity of the wild-west-like virtual world that is out there.

Make sure to do thorough research before joining any exchanges. Be especially certain to avoid small, decentralised start-ups like ezbtc.ca whenever possible. Even if a small exchange was fine in the past, if you happen to revisit it later on, do your research over again, as if you suspected it of the highest treason.

Finally, take snapshots of transactions, even the fiat that you are withdrawing - especially for large transactions. Be certain you have a record of it, just in case of a hack or ghosting of the CEO. 

Stay vigilant and critical.