Bitrabo Editorial
Grant Colthu, the ex-CEO of the Australian crypto platform Mine Digital, is facing legal issues as he has been charged with fraud. A news announcement indicates that Colthu is accused of misusing a customer’s funds amounting to $1.47 million (approximately 2.2 million AUD).
The funds were meant for purchasing Bitcoin, which the customer never received.
Overview of the Allegations
The Australian Securities and Investments Commission (ASIC) has confirmed the accusations, explaining that the money was sent to ACCE Australia, the parent company of Mine Digital, but it was used for different purposes instead.
ASIC has charged the former CEO of Mine Digital with fraud relating to a $2.2 million transaction
— ASIC Media (@asicmedia) October 21, 2024
According to ASIC, Colthu allegedly redirected the customer’s funds to cover ACCE’s debts, buy cryptocurrencies for other clients, or possibly both. The announcement stated:
Between May 2019 and September 2022, ACCE provided digital asset exchange services under the name ‘Mine Digital’. A customer reportedly paid $2.2 million for Bitcoin but received nothing in return. ASIC claims that Colthu misused those funds for ACCE’s liabilities and/or for other clients’ cryptocurrency purchases.
The allegations surfaced after the collapse of Mine Digital in September 2022, which left creditors with an estimated loss of $15 million.
Potential Consequences
When Colthu allegedly misappropriated the funds, Bitcoin’s value ranged from $18,000 to just over $24,000.
Had the customer received their Bitcoin, the investment could have seen significant growth; Bitcoin is now valued over $65,000, meaning that the investment could have increased by threefold.
The fact that the intended investment could have significantly appreciated adds weight to the accusations against him.
Colthu’s case was presented in Ipswich, Queensland’s Magistrates Court on October 21 and has been postponed until December 16. If convicted under section 408C of Queensland’s Criminal Code 1899, he may face a maximum sentence of 20 years.
Mine Digital, once a leading crypto exchange in Australia, fell into financial distress two years ago. The recent allegations against Colthu are part of the ongoing scrutiny surrounding the defunct exchange.
In addition to the fraud charges, the company was previously sued in 2022 for allegedly failing to take sufficient measures to prevent scammers from operating on its platform.
Featured image created with DALL-E, Chat from TradingView