Ex-CEO of Mine Digital could face up to 20 years in prison if found guilty under section 408C of Queensland’s Criminal Code 1899.
Grant Colthup, former CEO of Mine Digital, faces fraud charges after allegedly stealing $1.47 million from a Bitcoin investor. On October 21, 2023, the Australian Securities and Investments Commission (ASIC) revealed that the investor had transferred $1.5 million to ACCE Australia but never received the agreed cryptocurrency.
Following an ASIC investigation, the ex-CEO of crypto exchange Mine Digital has been charged with fraud in connection with a $2.2 million transaction https://t.co/tHrFgaHiSD
— ASIC Media (@asicmedia) October 21, 2024
ASIC’s investigation indicates Colthup may have redirected the funds to cover ACCE’s debts or buy cryptocurrencies for other parties. This accusation is part of a growing number against Mine Digital, which closed in September 2022. Since its downfall, creditors have been pursuing the recovery of $16 million from the failed company.
Legal Proceedings against Colthup
During a hearing at Ipswich Magistrates Court in Queensland, authorities officially charged Colthup with fraud. The trial has been rescheduled to December 16, 2024, giving both sides ample time to prepare their cases. Under section 408C of Queensland’s Criminal Code 1899, Colthup could face up to 20 years in prison if found guilty.
During the alleged theft period, Bitcoin’s value fluctuated between $18,890 and $24,580. Currently, Bitcoin’s price stands at roughly $66,800, which escalates the estimated stolen value to between $4 million and $5.20 million, underscoring the severity of the fraud.
Mine Digital, active from May 2019 to September 2022, functioned as a cryptocurrency exchange. Despite initially drawing significant investment, it collapsed due to financial discrepancies. Notably, while the company was in administration, it was discovered that it controlled a mere $20,000 in assets, in sharp contrast to the $16 million claimed by creditors, a fact reported by the Australian Financial Review on October 13, 2022.
Appointment of PKF’s Brad Tonks as Liquidator
Brad Tonks, a partner at PKF specializing in Business Recovery and Insolvency, was named the liquidator for ACCE following the collapse of Mine Digital on December 1, 2022. Shortly after that, in January 2023, PKF initiated legal action against Colthup, demanding he pay damages to creditors who were short $16 million.
As Bitcoin’s price rises, the consequences of such scams intensify, harming individual investors and the overall trust in digital currency platforms. ASIC is committed to upholding standards in the cryptocurrency industry. The unfolding legal proceedings will be pivotal for the remaining stakeholders of Mine Digital and the operations of similar exchanges in the future.
A crucial hearing set for December 16, 2024, will decide Colthup’s legal fate and assess whether the intricacies of crypto transactions affect the judicial decision. Regardless of the outcome, this situation warns both investors and digital currency enterprises about the need for clear and ethical management.
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