The ex-CEO of the now-defunct Australian cryptocurrency exchange, Mine Digital, has been charged with fraud for allegedly stealing $1.47 million (2.2 million AUD) from a customer attempting to purchase Bitcoin. This alleged theft occurred just two months before the company’s collapse in September 2022, according to a report from the Australian Securities and Investments Commission (ASIC) on October 21.
Details of the Alleged Fraud
According to ASIC, the customer transferred $1.5 million to ACCE Australia, a company associated with Mine Digital, intending to exchange it for Bitcoin. However, the customer never received the cryptocurrency. The regulator claims that Grant Colthup, the former CEO of Mine Digital, used the funds to either cover ACCE’s debts, purchase cryptocurrency for others, or both.
This is just the latest development in a series of accusations against Mine Digital, which shuttered in September 2022. Following its closure, creditors have sought to recover around $16 million from the firm.
Legal Proceedings and Potential Consequences
Colthup was formally charged with fraud under Queensland’s Criminal Code, specifically section 408C, which carries a maximum sentence of 20 years in prison. The case was presented at the Magistrates Court in Ipswich, Queensland, on October 21, and will resume on December 16, 2024.
The alleged fraudulent transaction occurred when Bitcoin was valued between $18,890 and $24,580, based on CoinGecko data. With Bitcoin now hovering around $67,460, the Bitcoin the customer intended to purchase would currently be worth between $4 million and $5.24 million.
Mine Digital’s Collapse and Ongoing Investigation
Mine Digital operated a cryptocurrency exchange and offered various trading services from May 2019 until its collapse in September 2022. After the company’s downfall, a preliminary investigation found that ACCE controlled only $20,000 in assets, far below the $16 million owed to creditors.
Brad Tonks, a Business Recovery and Insolvency Partner from PKF, was appointed as the liquidator for ACCE Australia on December 1, 2022. Just a month later, in January 2023, PKF reportedly sought legal action against Colthup, aiming to secure compensation for the creditors
