Business & Finance

Crypto Startup Founders Luxury Cars and Property Seized

A $500,000 Lamborghini S, two brand new Range Rovers and a $3 million condominium in Vancouver are seized by the Canadian authorities, at the orders of a court. The founders of blockchain consultancy firm Vanbex Labs, which allegedly raised $22 million through ICO (Initial coin Offering) of their FUEL token, used the money and spent it to support their lavish lifestyle. The court issued the forfeiture order and froze their assets immediately.

As per the order, the founders, Kevin Patrick Hobbs, and Lisa Angela Cheng, cannot sell their assets while they are still allowed to enjoy their interim possession. The owners are supposed to pay all taxes, maintain the condition of the property and pay the mortgage payments like usual owners of the property.

READ MORE: The Curious Case of a Crypto Exchange Founder’s Death, an Encrypted Laptop, Missing Wallets and a ‘Will’

In May 2018, the Etherparty announced to change the name to Vanbex Labs on twitter while the FUEL token dropped to 99% of its value. At the start of 2018, FUEL was valued at $0.43 and now it is looming around $0.007.

According to the court document, the firm Vanbex, formerly known as Etherparty, is an inactive company that doesn’t produce any usable products. The cryptocurrency firm launched the FUEL token in 2017. The token, designed for the company’s smart contracts’ system, raised $22 million and soon after,  the founders were found to have accumulated huge wealth. This wealth accumulation was alleged to be the result of a fraudulent ICO that was evident from their lavish lifestyle. An investigation was launched into Etherparty soon after and the court issued an order to freeze its founders’ assets after the investigation found them guilty of the crime.

The Canadian authorities have been pretty active in the cryptocurrency business for a while. Recently, they asked for public assistance to help identify four suspects of bitcoin theft all around Canada. They also released CCTV images of the suspects who were responsible for fraudulent transactions in Toronto, Montreal, Ottawa, Hamilton, Calgary, Winnipeg and Sherwood Park.

READ MORE: Your Bitcoin Dream House is Up For An Auction!

As the illicit activities are growing in crypto and blockchain, law enforcement and security bodies are also gaining momentum. Involved in a similar fraud, OneCoin founders were arrested a few weeks back in the US. Konstantin Ignatov and Ruja Ignatova, founders of OneCoin, were arrested on the charges of wire fraud, securities fraud, and money laundering. OneCoin expanded their fraudulent business by multi-level marketing scheme where a person got rewarded in OneCoin by inviting others to buy the token. OneCoin made €3.353 billion in sales revenue and earned profits of €2.232 billion. As per the findings, it was later found out that the claims made by the founders that OneCoin was backed by a proper blockchain and the price deviations depended on supply and demand were all false. They didn’t even let the investors to cash out or give them any liquidity event. After the investigation was launched, it was found out that one founder emailed the other looking for an exit scheme, to which the other replied;

Take the money, run and blame someone else for this…

SEE ALSO: Fraudsters in Bitcoin & Crypto are Clouding the Positive Opinion of the Masses


Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: shehryar@blockpublisher.com or contact the editor at editor.news@blockpublisher.com

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