ICO Promoter of Vanbex Faces Police Probe in Light of Massive $22 Million Blockchain Scandal

As part of their latest investigative efforts, Canadian law enforcement authorities have frozen the assets owned by the founders of blockchain services company Vanbex. These efforts are in line with the probes that have been carried out by the government agency since 2017— when the aforementioned firm was able to raise a whopping $22 million via its initial coin offering (ICO) program.

To be a bit more specific, we can see that documents released by local court authorities show that Vanbex executives ‘Kevin Hobbs’ and ‘Lisa Cheng’ were able to procure a total of $30 million CAD (about $22 million) worth of fiat and crypto assets via the sale of Vanbex’s native token offering called ‘FUEL’.

More On The Matter

In their whitepaper, Vanbex presented investors with an amazing roadmap that talked about the creation of an all-new smart contract system called ‘Etherparty’. However, as soon as all of the funds were raised, backers soon started to realize that the entire episode might have been one big sham since the company had failed to “develop any tangible/usable products” since the conclusion of the ICO.

Additionally, a filing by Canada’s Director of Civil Forfeiture reads as follows:

“Hobbs and Cheng had no plans 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. 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,”

With that being said, the folks over at Vanbex have denied any wrongdoing in the matter and are saying that they are willing to assist the police with their investigative efforts.

Lastly, it should also be noted that as per a government directive issued by Justice J.A. Power on March 14, local police authorities have seized two Land Rovers owned by Hobbs. Not only that, but the directive has also ordered the Bank of Montreal to freeze Hobbs’ two accounts — that are estimated to contain USD $1 million combined.

Vanbex Denies All Charges

As mentioned earlier, Hobbs and Cheng have referred to all of the fraud allegations leveled against them as being

“false”.

In addition to this, they also said that they never made any explicit promises to their investor base regarding the future economic potential of FUEL

“The tokens integrate bitcoin and Ethereum and the value of any currency is beyond any company or individual’s control, obviously. … Fuel tokens pay for transaction fees on the network for Smart Contracts deployed through our architecture.”

Other Key Details Related To Case Worth Bearing In Mind

  • Following the conclusion of the Vanbex ICO, Hobbs and Cheng proceeded to purchase two condominiums – one in Vancouver, another in Toronto – for about $3 million each. Not only that, but they also procured two Land Rovers as well as leased a Lamborghini worth $375,000 for a period of three years.
  • A court filing also states that over the course of the past 2-3 years, Hobbs has spent a lot of money on gambling at a “high roller level,”.
  • Between 2016 and 2018, Hobbs withdrew more than $1 million from casinos located within British Columbia.
  • Lastly, Hobbs currently possesses a criminal record in Canada (owing to illegal real-estate purchases he made all the way back in 2009). If that wasn't enough, he was also sentenced to 2.5 years in jail back in 2009 on counts of growing and trafficking marijuana.

Final Take

Despite the mountain of evidence that currently exists against Cheng and Hobbs, they are quite confident that the courts will dole out a decision in their favor eventually.

“Unfortunately, these things move at a pace beyond our control. In the meantime, we will continue to innovate and deliver quality products. Our counsel are working to put this astern in a fashion that decisively confirms our leading role in this industry, which we intend to maintain.Thank you for your loyalty and trust. It is not misplaced.”

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Shiraz J
Shiraz is a multi-year cryptocurrency analyst and blockchain journalist residing in Melbourne, Australia. When he is not writing about the bitcoin ecosystem, he enjoys the art of meditation, playing the blues and traveling the world.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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