The Supreme Court of British Columbia in Canada has begun taking action against the two founders of blockchain consultancy lab Vanbex as part of a lawsuit over allegedly defrauding investors of more than CAD 30 million (USD 22.5 million) in an initial coin offering. Bank accounts, two new Land Rovers, and a CAD4.1 million (USD 3 million) condominium belonging to founders Kevin Hobbs and Lisa Cheng have been frozen or seized in conjunction with the case.

According to court documents dated in March, Hobbs and Cheng had publicized Vanbex (also known interchangeably as Etherparty then) as a cryptocurrency firm in 2017. They launched a token called FUEL in an ICO, promising the token would be used to develop Vanbex’s smart contracts system with massive returns on investment. More than CAD 30 million (USD 22.5 million) was raised in fiat and crypto as a result, but supposedly “no useable products” were created, and Vanbex and its subsidiaries are but shell companies.

Court papers state that Hobbs and Cheng had “acquired sudden and substantial personal wealth” following the ICO, wealth which they allegedly used only for personal benefit – including the purchase of two Land Rovers and the condominium.

Canadian police began investigating this company for fraud in 2018. The documents also noted that Hobbs has prior criminal history, including charges and sentences served for marijuana possession and production, as well as money laundering from disposal of property.

Responding to the investigation and lawsuit, Vanbex said in a statement on its website (Apr 1) that “a disgruntled former worker for Vanbex has made false, damaging claims” against it and its founders. The allegation that Vanbex is a fraud with only shell companies and no real products is “completely untrue, and an insult to the hard work” of its team.

Vanbex added that it “has nothing to hide” and has been cooperating with investigations to clear its name.