Ontario seeks to seize luxury apartments in Toronto linked to alleged cryptocurrency fraud

TORONTO – The Ontario government has applied to seize a $ 3.6 million luxury apartment on the 52nd floor of a downtown Toronto building, claiming in a lawsuit that it was part of a lavish lifestyle made possible by a fraud scheme with many millions of dollars in cryptocurrency.

While regulators are becoming more confident in the booming digital currency sector – now worth $ 3 trillion globally according to some estimates – observers say fraud is also rising, urging potential investors to be wary of hype and do their research .

“I think part of what attracts people is that this is a decentralized currency and not well regulated. It attracts some people. And with that comes high risk,” says Angela Dennis of the Better Business Bureau. to CTV News Toronto.

Authorities say Kevin Hobbs and a partner raised $ 33.7 million in their Vancouver-based company, Vanbex, to promote a cryptocurrency called “Fuel” and what they called innovative “smart contracts.”

Hobbs 2

According to the lawsuit, the money went to buy real estate in Toronto and Vancouver, two Range Rovers, and to rent a 2018 Lamborghini Aventador.

The court document claims that Hobbs played $ 1.8 million at casinos in BC, and claims that they promised smart contracts that never came to fruition.

“Attorney General claims that Kevin Hobbs bought the condominium with funds he swindled from investors in his firm, Vanbex Group Incorporated,” the application reads.

Hobbs told CTV News Toronto that he denies any wrongdoing on his part, saying investigators do not understand the company’s cryptocurrency product.

“The authorities were misled and have failed to conduct a fair and open investigation. Instead, it has turned into a smear campaign. We are leading cases on the cases,” Hobbs said. “We expect to be upheld by a judge once he or she knows the true facts.”

His named partner in the civil forfeiture case, Lisa Cheng, said she and Hobbs are no longer partners.

apartment

“My interest today is to ensure that the people who supported this vision … I will return what I feel is theirs,” she said.

The RCMP confirmed to CTV News Toronto that its investigation is ongoing, but they have not filed any criminal charges.

They forwarded the case to civil forfeiture offices in both BC and Ontario. It is a way governments can sue to recover what they believe are assets obtained through a crime.

The apartment, owned by Hobbs, was sold in August for $ 3.61 million, with a judge ordering the money frozen until the case can be heard in a lawsuit.

None of the charges have been tested or proven in court.

apartment 22

Interest in cryptocurrency investments is skyrocketing. But more Canadians are also falling victim to fraud.

The Canadian Anti-Fraud Center says $ 20.7 million was lost nationwide in alleged cryptocurrency fraud in 2020, rising to $ 35.6 million lost in just eight months in 2021.

The Ontario Securities Commission is pushing cryptocurrency operations to bring their business into line with securities laws, believing that regulating it as a value will better protect investors.

In March, the OSC set guidelines for trading platforms and encouraged them to contact its staff.

announcement

As of November 10, OSC is in discussion with 20 crypto-trading platforms. Four platforms are registered or have received conditional approval to operate in Ontario: WealthSimple Crypto, Coinberry, Netcoins and Simply Digital Technologies Inc (Coinsmart), the regulator said.

The sector has a long way to go before investors can fully trust it, Dennis said.

“There are legitimate platforms and not so legitimate ones,” she said. “Do the research. Look up to see if the information they give you is accurate. If they suggest you’re going to make a lot of money fast, you need to start asking questions.”

.

Leave a Comment

Advertise