Ontario applied to seize luxury $3.6 million Toronto condo tied to alleged cryptocurrency fraud
The Ontario government has applied to seize a luxury $3.6 million condo on the 52nd floor of a building in downtown Toronto, alleging in a court application it was part of a lavish lifestyle made possible through a multi-million dollar cryptocurrency fraud scheme.
Even as regulators are becoming more assertive in the booming digital currencies sector -- now worth $3 trillion globally by some estimates -- observers say fraud is rising as well, asking would-be investors to be wary of hype and do their research.
"I think part of what is enticing to people is that this is a decentralized currency and not well regulated. That attracts some people. And along with that comes high risk," Angela Dennis of the Better Business Bureau told CTV News Toronto.
Authorities say that Kevin Hobbs and a partner raised $33.7 million at their Vancouver-based company, Vanbex, promoting a cryptocurrency called "Fuel" and what they called innovative "smart contracts."
According to the court application, the money went into real estate purchases in Toronto and Vancouver, two Range Rovers, and to lease a 2018 Lamborghini Aventador.
The court document claims Hobbs gambled $1.8 million in B.C. casinos, and alleges they promised smart contracts that never materialized.
"The Attorney General alleges that Kevin Hobbs purchased the condominium with funds he defrauded from investors of his company, Vanbex Group Incorporated," the application reads.
Hobbs told CTV News Toronto he denies any wrongdoing on his part, and says investigators don’t understand the company’s cryptocurrency product.
“The authorities were misled and have failed to conduct a fair and open-minded investigation. Instead, it has become a smear campaign. We are litigating the matters," Hobbs said. "We expect to be vindicated by a judge, once he or she knows the true facts."
His named partner in the civil forfeiture suit, Lisa Cheng, said she and Hobbs are no longer partners.
"My interest today is ensuring the people who supported this vision … I want to return what I feel is theirs," she said.
The RCMP confirmed to CTV News Toronto that its investigation is ongoing, but they haven't laid any criminal charges.
They forwarded the case to civil forfeiture offices in both B.C. and Ontario. That's a way governments can sue to recover what they believe are assets gained through a crime.
The condo, owned by Hobbs, was sold in August for $3.61 million, with a judge ordering the money be frozen until the matter can be dealt with at a trial.
None of the allegations have been tested or proven in court.
The interest in cryptocurrency investments is skyrocketing. But more Canadians are also falling victim to fraud as well.
The Canadian Anti-Fraud Centre says $20.7 million was lost across the country 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 in line with securities law, believing that regulating it as a security will better protect investors.
In March, the OSC set guidelines for trading platforms and encouraged them to contact its staff.
As of November 10, the 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 are providing you is accurate. If they're suggesting you’re going to make a lot of money fast, you need to start asking questions."
CTVNews.ca Top Stories
Cargo ship had engine maintenance in port before Baltimore bridge collapse, officials say
The cargo ship that lost power and crashed into a bridge in Baltimore underwent 'routine engine maintenance' in port beforehand, the U.S. Coast Guard said Wednesday.
A Nigerian woman reviewed some tomato puree online. Now she faces jail
A Nigerian woman who wrote an online review of a can of tomato puree is facing imprisonment after its manufacturer accused her of making a “malicious allegation” that damaged its business.
Far North police 'dispatch' polar bear stalking schoolyard
Police and local hunters in an Ontario Far North First Nation community have “dispatched” a polar that was showing abnormal behaviour and treating the area as a hunting ground.
Donald Trump assails judge and his daughter after gag order in N.Y. hush-money criminal case
Donald Trump lashed out Wednesday at the New York judge who put him under a gag order that bars him from commenting publicly about witnesses, prosecutors, court staff and jurors in his upcoming hush-money criminal trial.
Families shocked after Niagara Falls hotel cancels bookings made year in advance of solar eclipse
After having the foresight to book their Niagara Falls hotel rooms more than a year in advance, several families planning to take in the solar eclipse next month were shocked to find out their reservations had been cancelled.
B.C. rescuers face 'high likelihood' of failure to reunite orphaned orca with pod
The race to reunite an orphaned orca calf that’s stuck in a shallow lagoon with a neighbouring pod has entered its fifth day, and a marine scientist says the clock is ticking.
Video shows police interrupting auto theft in progress outside Toronto home
New video footage obtained by CP24 shows the attempted theft of a vehicle in a North York driveway earlier this month that was ultimately interrupted by police.
Majority of Canadians believe in life after death: Angus Reid survey
A new survey from the Angus Reid Institute has found that a majority of Canadians believe in some form of life after death, a proportion that has held steady for decades.
MyPillow, owned by U.S. election denier Mike Lindell, formally evicted from Minnesota warehouse
A court ordered the eviction Wednesday of MyPillow from a suburban Minneapolis warehouse that it formerly used.