Canadian Police Freezes Assets Of Founders Of $22 Million Blockchain Company Vanbex

Canadian Police Freezes Assets Of Founders Of $22 Million Blockchain Company Vanbex

 
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Canadian police has frozen assets of founders of blockchain service company Vanbex, Coindesk reports. The fraud investigation into the Vanbex’s $22 million ICO led by Canada’s Federal and Serious Organized Crime Division and Revenue Agency for tax offences, continues in the meantime.

Vanbex is a Canada-based company specialized in consulting, communications and development for blockchain businesses. The company raised around USD$22 million in 2017 through Initial Coin Offering (ICO).

The company was founded back in 2013 by Lisa Cheng and Kevin Hobbs, both of whom are subjects of the ongoing investigation. Allegedly, these two persons lied to investors that FUEL, their own token, can be used for smart contracts and would dramatically increase in value, and have hence deceived investors of over CAD$30,000,000 raised.

Vanbex “developed no usable products”, according to the court filing, nor do they intend on developing the product.

“FUEL tokens became virtually worthless in dollar value while not being capable of use in the non-existent smart contracts system or for any product or service other than a cryptocurrency coin creating service called Rocket.”

Mr. Hobbs was previously convicted in the US for “possession of 100 pounds of marijuana and having US$178,000 in cash in a suitcase”. Moreover, he was convicted in two additional oncassions in 2008 and 2009 for cash smuggling and unlawful possession of marijuana, respectively.

Allegedly, Cheng and Hobbs used investors’ money to buy two luxurious condos in Vancouver and Toronto, worth CAD$4 and CAD$3.7 million respectively. The Toronto condo was paid entirely in cash, and they also purchased and rented luxury vehicles. In addition, Hobbs was placed on a watch list by British Columbia Lottery Corporation (BCLC) for gambling over CAD$1.8 million, which were unsourced funds.

The court has authorized the government to seize two Land Rovers, freeze two Hobbs’ accounts in Bank of Montreal to freeze Hobbs’ containing almost $1 million, and ordered both not to sell, borrow against, or damage their Vancouver condominium for at least 30 days.

According to Coindesk, Cheng and Hobbs have denied the accusations and added that ongoing investigation is a result of “false claims by a former contractor.”

“We remain confident that the truth will prevail, and this will be behind us soon,” they added.