Grant Colthu, the former CEO of the Australian cryptocurrency exchange Mine Digital, seems to be facing legal issues. A press release indicates that Colthu is now charged with fraud for allegedly misusing a customer’s $1.47 million (2.2 million AUD).
According to the release, the customer had plans to use the funds for purchasing Bitcoin, but the cryptocurrency was never received.
The Allegations
In a statement issued earlier today, the Australian Securities and Investments Commission (ASIC) validated the accusations against Colthu, noting that the funds were sent to his company’s parent organization, ACCE Australia, but were redirected for other uses.
After an ASIC investigation, the former CEO of the crypto exchange Mine Digital has been charged with fraud regarding a $2.2 million transaction https://t.co/tHrFgaHiSD
— ASIC Media (@asicmedia) October 21, 2024
ASIC alleges that Colthu misappropriated the customer’s funds to cover ACCE’s debts, acquire cryptocurrency for other clients, or a combination of both. The release stated:
Between May 2019 and September 2022, ACCE operated a digital asset trading platform and provided cryptocurrency trading services to clients under the name ‘Mine Digital’. ASIC asserts that a customer of Mine Digital sent $2.2 million to ACCE for Bitcoin, but never obtained any cryptocurrency in return. ASIC contends that Colthu utilized the funds to settle ACCE’s liabilities and/or obtain cryptocurrency for others.
These allegations emerge following the demise of Mine Digital in September 2022, which has left creditors trying to reclaim an estimated $15 million in lost investments.
The Implications
At the time of the alleged misappropriation, Bitcoin prices were fluctuating between $18,000 and just over $24,000.
Although the customer did not receive the Bitcoin as promised, had they acquired it, the value of their investment would have significantly increased.
With Bitcoin currently trading above $65,000, the potential investment could have more than tripled in worth. This factor underscores the severity of the fraud allegations against Colthu.
Currently, the case against Colthu was presented at the Magistrates Court in Ipswich, Queensland, Australia, on Monday (October 21) and has been postponed until December 16. Colthu faces a maximum penalty of 20 years if convicted under section 408C of Queensland’s Criminal Code 1899.
Mine Digital, once a leading crypto exchange in Australia, fell into decline two years ago due to financial issues. The recent fraud accusations against Colthu are merely one of many that have surfaced since the company’s collapse.
In 2022, the now-defunct company was also sued for “failing to adequately prevent scammers from exploiting its platform.”
Featured image created with DALL-E, Chat from TradingView
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