Mine Digital’s ex-CEO faces charges for embezzling more than $1.5 million

Grant Colthup, the former CEO of ACCE Australia, faces a single charge of fraud following an investigation by the Australian Securities and Investments Commission (ASIC).

Colthup, who appeared in Ipswich Magistrates’ Court, Queensland, was accused of embezzling $1.47 million (A$2.2 million) from a client.

$1.5M Bitcoin Payment Disappears

From May 2019 to September 2022, ACCE operated a digital asset exchange platform that provided cryptocurrency trading services to customers under the brand name “Mine Digital”.

According to a press release, the incident dates back to July 2022, when a customer paid the company $1.5 million to buy Bitcoin but never received the cryptocurrency.

ASIC alleges that instead of delivering the Bitcoin, Colthup used client funds to cover ACCE’s financial liabilities and to purchase cryptocurrency for other clients.

The charge, brought under section 408C of the Queensland Criminal Code 1899, carries a maximum sentence of 20 years in prison. The case has been postponed until December 16, 2024, and will be processed by the Prosecutor’s Office.

Legal problems of ACCE

This legal development is just one of many controversies that have plagued ACCE and Mine Digital. The company collapsed in September 2022, with creditors scrambling to recover approximately $16 million in owed funds.

The collapse of the Queensland-based exchange was handed to PKF administrator Brad Tonks in September 2022, just weeks before the infamous fall of the US-based exchange, FTX.

A local publication, the Australian Financial Review, then reported that Tonks’ subsequent investigations into the company had revealed troubling financial discrepancies, including limited records, an irregular balance sheet and the existence of only $20,000 in assets .

In a statement to creditors, the PKF partner noted that substantial digital assets appeared to have been transferred out of ACCE prior to the administration, with insufficient records available to track the transactions.

“Investments made by clients in digital assets do not appear to have been recorded on the company’s balance sheet,” Tonks reported.

The collapse also came shortly after a legal dispute with a self-managed superannuation fund over a separate investment loss of $1.6 billion in 2020. The fund alleged that ACCE did not take adequate steps to prevent a social engineering scam known as “500 Investments”.

Although the exchange defended itself in that case, the incident contributed to increasing its legal challenges.

By December 2022, PKF had been appointed ACCE’s official liquidator and Tonks commenced legal proceedings against Colthup to recover the $16 million owed to creditors.

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