The Australian financial regulator has announced that the alleged fraud took place just two months before Mine Digital's collapse in September 2022.
Fraud Charges for Stealing $1.5 Million
The former CEO of Australian cryptocurrency exchange Mine Digital, Grant Colthup, is facing fraud charges for allegedly stealing $1.47 million (2.2 million AUD) from a customer. The customer intended to exchange the money for bitcoin but never received the cryptocurrency.
Misuse of Funds for Other Purposes
According to a statement by the Australian Securities and Investments Commission (ASIC) on October 21, the customer paid $1.5 million to the parent company of Mine Digital, ACCE Australia. ASIC claims that Colthup used these funds to pay ACCE's debts, purchase cryptocurrency for other customers, or a combination of both.
Company Collapse and Creditors Seeking Compensation
This case is the latest in a series of accusations against the company since its collapse in September 2022. Creditors have been attempting to recover $16 million ever since.
Colthup was charged with fraud at a hearing in Ipswich, Queensland, Australia, and the case was adjourned until December 16. The charge is under Section 408C of the Queensland Criminal Code of 1899, which carries a maximum sentence of up to 20 years in prison.
Significant Bitcoin Price Fluctuations
At the time the customer attempted to purchase bitcoin, the cryptocurrency’s price ranged between $18,890 and $24,580, according to CoinGecko data. Given that bitcoin is currently trading around $67,460, the value of the bitcoin now could be between $4 million and $5.24 million.
Mine Digital’s Operations and Collapse
Mine Digital operated a cryptocurrency trading platform from May 2019 to September 2022, when it was forced into administration. Early investigations revealed that ACCE, the parent company, held only $20,000 in assets, far below the $16 million claimed by creditors.
Planned Lawsuit Against Colthup
In December 2022, Brad Tonks, a partner at PKF, was appointed as the liquidator of ACCE. According to the Australian Financial Review (AFR), PKF was preparing to sue Colthup in January 2023 to secure compensation for creditors seeking to recover the $16 million.
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