The former CEO of Australian cryptocurrency exchange Mine Digital is facing fraud charges for allegedly misappropriating $1.47 million (AU$2.2 million) from a customer who wanted to convert the funds into Bitcoin.

In an October 21 announcement, the Australian Securities and Investments Commission (ASIC) said Mine Digital’s customers paid $1.5 million to ACCE Australia – but never received the cryptocurrency.

ASIC alleges that Colthup used the money to pay off ACCE’s debts, purchase cryptocurrency for others, or a combination of both.

This is the latest allegation against the company, which collapsed in September 2022. Since then, creditors have sought to recover $16 million from the company.

The country's securities regulator said Grant Colthup was informed of the fraud charges during a hearing at the Magistrates Court in Ipswich, Queensland, Australia on October 21, and the case against Colthup was adjourned to December 16, 2024.

Source: ASIC

Colthup was charged under section 408C of the Queensland Criminal Code 1899, which carries a maximum sentence of 20 years imprisonment.

Data from CoinGecko shows Bitcoin fluctuating between $18,890 and $24,580 as ASIC claims a customer made a $1.47 million Bitcoin purchase.

With Bitcoin currently trading around $67,460, that amount of Bitcoin would now be worth between $4 million and $5.24 million.

Mine Digital operated a cryptocurrency trading platform and provided various trading services from May 2019 to September 2022, when the company entered bankruptcy administration proceedings.

An initial investigation revealed that only $20K worth of assets were under ACCE’s control – far less than the $16 million sought by creditors, as reported by the Australian Financial Review (AFR) on 13 October 2022.

PKF Business Recovery and Insolvency Partner Brad Tonks was appointed as liquidator of ACCE more than two months after the cryptocurrency platform collapsed on December 1, 2022.

However, PKF is said to be seeking to sue Colthup a month later in January 2023, asking the court to order compensation for creditors still seeking $16 million, the AFR reports.

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