BTC Wires

Yet Another Fraudulent ICO?

Reports of yet another initial coin offering (ICO) has been found to be nothing but a fraud. Like many of its’ precursors, the founders of the Vanbex blockchain services company has figured that they would be able to get away with a scam surrounding a new cryptocurrency token, but law enforcement officials have not let it slip through their fingers. Corresponding bank accounts have now been frozen, and property seized, and the company’s founders will most likely spend time behind bars.

Kevin Hobbs and Lisa Cheng launched an ICO for Canada-based Vanbex in 2017 and were offering a token called FUEL. The ICO raised had managed to raise around $22 million in fiat and crypto, with which the company was planning to use to develop a new smart contract system dubbed Etherparty.

However, in spite of such announcements, there have been no developments on the part of Vanbex. According to the civil forfeiture action that was filed in the Supreme Court of British Columbia, Hobbs and Cheng “did not intend to develop the products they were marketing but rather [acted] with [the] intention to misappropriate the corporately invested funds raised for their own personal benefit.”

The action further stated,

“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.”

It was on March 14th that Canadian Justice J.A. Power authorized the seizure of two Land Rovers and ordered the freezing of accounts at the Bank of Montreal.

Hobbs and Cheng, as well as Vanbex, came under investigation by the Royal Canadian Mounted Police in May of last year which was also incidentally when the ICO was wrapping up. Hobbs and Cheng went on a shopping spree, purchasing two condominiums, two Land Rovers and leasing a $375,000 Lamborghini. The investigations also revealed that Hobbs took up gambling “domestically and internationally at the high roller level,” at one point withdrawing $1.3 million from British Columbia casinos.

Hobbs already has a criminal record in Canada before Vanbex as he was previously convicted of possession of property that was “criminally obtained” and money laundering. The pair have denied the charges, asserting that it’s all a misunderstanding that will be cleared up. No criminal charges have been filed against the pair yet, but that most likely will change soon.