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

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

The Australian Securities and Investments Commission has charged Grant Colthup with a fraud charge after a Mine Digital customer failed to receive Bitcoin for which he paid A$2.2 million (about $1.47 million) in July 2022.

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

In its complaint, ASIC alleges that the customer paid the money to ACCE Australia and expected to receive Bitcoin in return, but Colthup used the money to pay off his company’s obligations or buy cryptocurrency with it, or both.

But that’s not the only allegation the defunct firm has faced over the years. Following the crash in 2022, an investigation by the Australian Financial Review found large discrepancies between the firm’s assets under management; Although the exchange’s creditors were demanding $16 million in damages, it had assets of only $20,000.

Additionally, ACCE’s court-appointed liquidator also filed a lawsuit against Colthup in January 2023, seeking compensation for the company’s creditors.

Colthup was charged under section 408C of the Queensland Criminal Code 1899 and could face a maximum sentence of 20 years behind bars. He will appear in court on December 16, 2024.

This is not ASIC’s only legal case involving a cryptocurrency firm in which investors have suffered significant losses this year.

In April this year, the regulator launched 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 pension funds. Over 160 million AUD.

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