Grant Colthu, former CEO of Australian crypto exchange Mine Digital, appears to be in legal trouble. According to a crypto-exchange-mine-digital-charged-with-fraud/” target=”_blank” rel=”noopener nofollow”>Press releaseColthu now faces fraud charges for allegedly misappropriating $1.47 million (A$2.2 million) from a client.
The statement revealed that the customer intended to use the funds to purchase bitcoin, but the cryptocurrency was never delivered.
The alleged case
In a statement released today, the Australian Securities and Investments Commission (ASIC) confirmed the allegations against Colthu, stating that the funds were transferred to his company, Mine Digital's parent company, ACCE Australia, but were diverted for other purposes.
<blockquote class="twitter-tweet”>
Following an ASIC investigation, the former CEO of cryptocurrency exchange Mine Digital has been charged with fraud in relation to a $2.2 million transaction. https://t.co/tHrFgaHiSD
– ASIC Media (@asicmedia) twitter.com/asicmedia/status/1848510390486900809?ref_src=twsrc%5Etfw” target=”_blank” rel=”noopener nofollow”>October 21, 2024
ASIC alleges that Colthup used client funds to cover ACCE obligations, purchase cryptocurrency for other clients, or both. The statement said:
Between May 2019 and September 2022, ACCE operated a digital asset exchange platform and offered cryptocurrency trading services to clients under the name 'Mine Digital'. ASIC alleges that a Mine Digital customer paid $2.2 million to ACCE for bitcoin and never received any cryptocurrency in return. ASIC alleges that Colthup used the funds to pay ACCE obligations and/or purchase cryptocurrency for others.
Notably, these allegations come in the wake of the collapse of Mine Digital in September 2022, which left creditors seeking to recover lost funds, estimated to be approximately $15 million.
The verdict
When Colthup allegedly misappropriated client money, bitcoin traded between $18,000 and slightly above $24,000.
Although the customer never received the bitcoin as supposed, if he had received it as planned, the value of his cryptocurrency would have increased significantly.
With bitcoin trading above $65,000, the investment would have tripled in value. Meanwhile, the fact that the client's planned investment could have increased substantially has increased the seriousness of the allegations.
For now, the case against Colthup was heard in Ipswich Magistrates Court, Queensland, Australia, on Monday (October 21) and adjourned until December 16. Colthup could face a maximum sentence of 20 years if convicted under section 408C. of the Queensland Criminal Code 1899.
Mine Digital, once a prominent crypto exchange in Australia, collapsed amid financial difficulties 2 years ago. The latest fraud allegations against Colthup are just one of many accusations surrounding the company since it disappeared.
In 2022, the now defunct company was also technology/australian-crypto-exchange-falls-into-administration-20220921-p5bjqj” target=”_blank” rel=”noopener nofollow”>defendant for “allegedly not doing enough to remove scammers from their platform.”
Featured image created with DALL-E, Chat from TradingView
<script async src="//platform.twitter.com/widgets.js” charset=”utf-8″>
