ASIC charges former crypto exchange CEO with $1.47m Bitcoin fraud

Australia’s securities watchdog has charged the former CEO of defunct crypto exchange Mine Digital for defrauding an investor of $1.47 million.

The Australian Securities and Investments Commission has charged Grant Colthup with one count of fraud after a customer of Mine Digital did not receive the Bitcoin they paid 2.2 million Australian dollars (roughly $1.47 million) for in July 2022.

Mine Digital operated as a cryptocurrency exchange under ACCE Australia Pty Ltd, offering trading services between May 2019 and September 2022. The platform collapsed in September 2022, and creditors have been pushing for $16 million in claims since then.

In its complaint, ASIC claims that the customer paid the money to ACCE Australia, expecting to receive Bitcoin in return, but Colthup allegedly used the funds to pay for his company’s liabilities or purchase cryptocurrencies with it, or both.

However, this isn’t the only allegation the defunct firm has faced over the years. Following its collapse in 2022, an investigation conducted by the Australian Financial Review revealed the firm had major discrepancies with its assets under management, showing only $20,000 in assets despite the exchange’s creditors claiming $16 million in losses.

Moreover, ACCE’s court-appointed liquidator also sued Colthup in January 2023 seeking compensation for the company’s creditors.

Colthup has been charged under section 408C of Queensland’s Criminal Code 1899 and could be facing a maximum of 20 years behind bars. He is set to appear in court on December 16, 2024.

This isn’t ASIC’s only legal action this year involving a cryptocurrency firm where investors have suffered significant losses. 

In April this year, the regulator initiated civil proceedings against NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd, accusing the companies of misleading around 450 investors into investing in blockchain mining packages through self-managed superannuation funds, resulting in losses of over 160 million AUD.

ASIC also initiated a nationwide crackdown against cryptocurrency scams after it was criticized by Australia’s minister for financial services in January for failing to warn locals about a $1.3 billion crypto scam.