The blockchain consulting firm VanBex had its crypto assets frozen by Canadian Police after the founders became suspects in a $22 million alleged fraudulent initial coin offering (ICO) according to a published court document that reached our blockchain news platform.
The document shows that the founders of Vanbex, Kevin Hobbs and Lisa Cheng became known to the public after claiming that they operate a Vancouver-based crypto company since 2017. The company which is now known as Vanbex and Etherparty, is actually non-existent or a shell company that didn’t really develop any products.
The police decided to freeze the accounts on both of the co-founders of Vanbex and seized two Land Rovers as well. The police also ordered both Hobbs and Cheng not to sell damage or borrow their Vancouver condominium in the next 30 days until they receive a notice from the court.
Since 2017, Vanbex launched its own cryptocurrency dubbed Etherparty or FUEL, which was a token that was initially designed to provide an improved ecosystem for the smart contracts system of the company which promised investors huge returns. Cheng and Hobbs managed to raise more than 30 million Canadian dollars which are about $22 million USD and then the pre-sale of FUEL was accompanied with the acquisition of a huge chunk of wealth by both of the founders.
The Canadian Mounted Police launched an investigation for the company in May 2018. They determined that Hobbs and Cheng were defrauding investors by offering insanely high returns from the FUEL tokens while not indenting to actually provide a product but to only keep the money for personal benefit.
After the allegations emerged, the court stated that all of the property that was purchased by both of the co-founders was purchased with the wrongfully obtained funds, including vehicles and real estate. The court also stated that the funds were used by Hobbs for gambling.
Money laundering and marijuana trafficking are both a part of Hobb’s criminal history according to the court documents.
Currently, Vanbex didn’t answer to the court’s orders and their account on Twitter is also silent.
Etherparty is down by 8 percent and is trading at $0.0128 with a market cap of about $7.7 million.
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