Category Archives: BC

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Two Canadian Crypto Firm Owners Fight $30 Million Fraud Accusation

Two Vancouver cryptocurrency firms are fighting accusations of fraudulent activity to the tune of USD 30 million involving an initial coin offering.

The two company owners, Lisa Angela Cheng and Kevin Patrick Hobbs, are to fight their cases in the British Columbian (BC) courts, after having denied any wrongdoing, claiming they have “never misappropriated funds.”

The  B.C. Civil Forfeiture Office’s claim is that the couple raised money by “deceit, falsehood or fraudulent means,” by launching their FUEL token as part of their two companies’ businesses.  The companies Vanbex Group Inc. and Etherparty Smart Contracts Inc have been subjected to an RMCP investigation which determined that the couple raised more than USD 30 million illegally. The claim states:

“…by falsely representing corporate investment opportunities … knowing they did not intend to use the invested funds to develop products they were marketing but rather with the intention to misappropriate the corporately invested funds raised for their own personal benefit.”

In question are a three-bedroom townhouse with the view of Coal Harbour bought in late 2017 by Hobbs and Cheng for USD 4.1 million in cash, two Range Rovers, an apartment in Toronto purchased for just under USD 3.74 million and a leased Lamborghini. Hobbs has a criminal record, including for money laundering in 2008.

Cheng and Hobbs say Vanbex did not solicit funds from investors for the development or distribution of the FUEL token and did not claim the value of the tokens would increase. The terms were clear and transparent going in and all risks documented, according to the couple’s legal counsel. Their statement claims:

“We intend to defend vigorously and to present a complete and truthful narrative for the court. We are confident that at the end of the day the truth will come out and the facts will prevail in our favor.”

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Can Bitcoin Save a Canadian Ghost Town?

The Canadian mill town of Ocean Falls on British Columbia’s central coast has seen its population shrink from 5,000 to just a handful of residents, becoming a ghost town, but Bitcoin mining might be bringing back the good old days.

Ocean Falls is a community on the Central Coast of British Columbia, Canada. Formerly a large company town owned by Crown Zellerbach, it is only accessible via boat or seaplane, and is home for a few dozen full-time residents, with the seasonal population upwards of 100.

It became the classic tumbleweed ghost town of western movies after the paper mill which supported a buzzing small community, finally shut down in the late 1970s, seeing the town’s population desert Ocean Falls for more lucrative prospects.

Since then it’s remained home to a few, only buoyed by some seasonal interest during a few months in the Canadian summer. But that’s changing. From this summer, sounds began to emanate from the old deserted mill; the first heard in almost half a century. These were not the buzz of a saw though, but the distant hum of electricity; the sound of Bitcoins being created.

Ocean Falls has now become home to a mini Bitcoin mining industry, utilizing the dam which used to provide the mill’s 13 MW of power, enough also to power the two nearby towns of Bella Bella and Shearwater. The electricity was always more than enough to supply the power needed for the three towns, so now the surplus is being put to good use.

The idea was the brainchild of Kevin Day, a crypto enthusiast who first came across the name Ocean Falls watching a documentary in the State capital of Vancouver eight years back. His newly acquired interest in crypto later drove him to consider mining Bitcoin, and the ghost town came to mind once again.

Day started up the company Ocean Falls Blockchain (OFB), telling his investors he would be buying 6 MW of energy from Boralex, the private utility that owns the dam, by the end of 2018, bringing in about USD 5.7 million in annual revenue from the Bitcoins created. Plans were to then expand out from Ocean Falls with predictions that OFB would have over 17,500 Bitcoin mining units by 2012 by increasing its energy consumption to 30 MW of power.

In true Canadian pioneering spirit, Day shipped in hundreds of Bitmain Antminer S9 mining units and a half ton transformer, transported from Vancouver by truck, then barged up the river the rest of the way. He then constructed his lab using the paper mill complex as an operations area then installed huge fans for cooling. The project was born and the mill brought back to life.

It’s unlikely that a handful of computer operators will bring the old town back but there is life in the place now. Keith Cockell, son of one of the original dam operators in the 1950s and 1960s, is back in town and doing his father’s job now. He likes what he sees:

“There’s been a lot of years where we’ve been waiting for someone to come along… the day we fired up, the miners started going, there was the humming, and I said to Kevin, “It’s a good feeling seeing that extra power being used”.”

Toni Ziganash, who runs a boarding house from the old bank building in town, would love to see a local economy bringing back the public:

“We have a very ageing population here, and when I say ageing, that means 70 and up. So there’s not a lot of energy. There’s not a lot of enthusiasm for anything new, to tell you the truth… So I would just like to attract some younger people to come in.”

Day pulled his server’s switches in July. It remains to be seen what awaits Ocean Falls, and if this could be the start of something special, revitalizing an economy frozen in time.

 

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