Australia’s securities regulator has filed charges against Grant Colthup, the former CEO of the now-defunct cryptocurrency exchange Mine Digital, for allegedly defrauding an investor of AUD 2.2 million (approximately USD 1.47 million).
The Australian Securities and Investments Commission (ASIC) accuses Colthup of committing one count of fraud after a Mine Digital customer failed to receive the Bitcoin they had paid for in July 2022. Mine Digital operated under the umbrella of ACCE Australia Pty Ltd, providing cryptocurrency trading services from May 2019 until its collapse in September 2022. Since the exchange’s downfall, creditors have been pursuing claims amounting to AUD 16 million.
According to ASIC’s complaint, the investor transferred funds to ACCE Australia with the expectation of receiving Bitcoin in return. However, it is alleged that Colthup misappropriated the funds, either using them to settle the company’s debts or to purchase cryptocurrencies for personal gain, or potentially both.
This case is not the only legal trouble the defunct exchange has faced. An investigation by the Australian Financial Review following Mine Digital’s collapse revealed significant discrepancies in the firm’s reported assets. The firm claimed to hold only AUD 20,000 in assets, despite creditors reporting losses of AUD 16 million.
Additionally, in January 2023, a court-appointed liquidator for ACCE launched a lawsuit against Colthup, seeking compensation for the company’s creditors.
Colthup has been charged under section 408C of Queensland’s Criminal Code 1899, which could result in a maximum sentence of 20 years in prison. His court appearance is scheduled for December 16, 2024.
This charge is part of ASIC’s broader efforts to address significant investor losses within the cryptocurrency sector. Earlier this year, ASIC initiated civil proceedings against NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd. These companies are accused of misleading around 450 investors into purchasing blockchain mining packages through self-managed superannuation funds, leading to losses exceeding AUD 160 million.
In response to mounting criticism from Australia’s Minister for Financial Services in January regarding a failure to alert the public about a AUD 1.3 billion cryptocurrency scam, ASIC has also ramped up its enforcement actions against cryptocurrency-related frauds.
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