The court froze the assets of the organizers ICO Etherparty due to suspicion of fraud
Canadian police have frozen assets owned by the founders of blockchain services company Vanbex, as part of a fraud investigation into a 2017 initial coin offering (ICO) that raised $22 million.
According to court documents, the organizers of ICO were involved in the distribution of the token FUEL, which was to be used in the system of smart contracts Etherparty developed by them and “significantly increase in price.”
However, Vanbex "did not develop any usable product" and "did not intend to develop a product which it was promoting, but intended to appropriate the invested funds for its own benefit."
- “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,” which was different than what the purchasers were promised, the director claimed.
To date, no criminal charges have been filed. The founders of Vanbex deny their guilt in fraud, pointing out that they did not make promises related to the rise in the price of the asset, and claim to cooperate with the investigation. They also noted that Vanbex settlement accounts were not blocked, and the number of their clients exceeded 50.
The court, however, allowed two Land Rover cars to be confiscated from them and ordered the Bank of Montreal to freeze accounts with a little less than $ 1 million. Taking into account the fact that simultaneously with the ICO, they "acquired sudden and substantial personal wealth", including two a condominium in Vancouver and Toronto worth $ 3 million each, called cars, and also leased Lamborghini for $ 375,000 for three years
Besides, one of them spent investor money on gambling "domestically and internationally at the high roller level." In November 2017, the British Lot Columbia Lottery Corporation included it in its “watch list” to prevent the game from being played without confirming the source of funds. The suspect, in turn, said that in the past he was a professional poker player and never received a ban on visiting a casino.