The former CEO of Mine Digital, an Australian cryptocurrency exchange, has been charged with fraud for allegedly misappropriating $1.47 million (2.2 million Australian dollars) from a customer attempting to exchange funds for Bitcoin . The Australian Securities and Investments Commission (ASIC) announced the charge on October 21, revealing that the customer had transferred the funds to ACCE Australia but never received the cryptocurrency in return.
ASIC’s investigation indicates that Grant Colthup, the former CEO, may have utilized the misappropriated funds to settle ACCE’s debts, acquire cryptocurrency for third parties, or possibly a combination of these actions. This allegation adds to the existing concerns surrounding Mine Digital, which ceased operations in September 2022, leaving creditors to pursue the recovery of $16 million.
During a hearing at the Magistrates Court in Ipswich, Queensland, ASIC informed Colthup of the fraud charge, and the proceedings have been postponed until December 16, 2024. Charged under section 408C of Queensland’s Criminal Code, the accusation carries a severe penalty of up to 20 years in prison.
The timeframe of the alleged fraud coincides with significant fluctuations in Bitcoin ’s market price, which ranged from approximately $18,890 to $24,580 around the time the funds were reportedly transferred. With Bitcoin ’s current valuation around $67,460, the amount that the customer sought to invest could now be valued between $4 million and $5.24 million, highlighting the financial ramifications of the case.
Mine Digital provided trading services and operated its exchange platform from May 2019 until its administration in September 2022. An initial investigation revealed that ACCE was in possession of only $20,000 in assets, starkly contrasting with the $16 million claimed by its creditors. Following the collapse, a liquidator was appointed, and there were intentions to pursue legal action against Colthup to secure compensation for distressed creditors.
