Ex-CEO of Crypto Exchange Charged in $1.5M Bitcoin Fraud

Grant Colthup, former CEO of Australian cryptocurrency exchange Mine Digital, is in hot water. He faces fraud charges after allegedly misappropriating $1.47 million (2.2 million AUD) from a customer, who had intended to use the funds to purchase Bitcoin.

The Australian Securities and Investments Commission (ASIC) revealed that the customer’s money, which was meant to buy Bitcoin, was diverted for other uses. Colthup allegedly transferred the funds to ACCE Australia, Mine Digital's parent company, but instead of delivering the Bitcoin, he used the money for ACCE’s liabilities or to purchase cryptocurrency for other clients.

ASIC's investigation into the case found that between May 2019 and September 2022, ACCE ran a cryptocurrency exchange under the name Mine Digital, offering digital asset trading services. During this period, a customer sent $2.2 million AUD to purchase Bitcoin but never received the cryptocurrency. ASIC accuses Colthup of using the funds improperly, either to cover company debts or to serve other customers.

Mine Digital collapsed in September 2022, leaving creditors trying to recover around $15 million. The fraud charges against Colthup are just one of many allegations tied to the company’s downfall.

The seriousness of the accusations is amplified by the fact that had the customer received their Bitcoin as planned, the investment would have significantly increased in value. Bitcoin was trading between $18,000 and $24,000 at the time of the transaction, but is now valued above $65,000, meaning the customer’s investment could have tripled.

Colthup’s case was heard in Ipswich Magistrates Court on October 21, 2024. It has been adjourned to December 16, 2024. If found guilty under Queensland’s Criminal Code, he faces up to 20 years in prison.