ASIC Charges Former Mine Digital CEO Grant Colthup with $1.4 Million Fraud

ASIC Charges Former Mine Digital CEO Grant Colthup with $1.4 Million Fraud

The Australian Securities and Investments Commission (ASIC) has formally charged Grant Colthup, the former CEO of the now-defunct cryptocurrency platform Mine Digital, with fraud related to a transaction worth A$2.2 million (approximately $1.46 million) that took place in July 2022. The charges were announced on Tuesday, detailing a serious breach of trust involving customer funds.

Colthup appeared at the Ipswich Magistrates Court where he faced a single count of fraud. According to ASIC’s allegations, a customer paid $2.2 million for Bitcoin through Mine Digital but never received the cryptocurrency. This transaction was conducted between May 2019 and September 2022 with ACCE Australia Pty, the operating entity behind Mine Digital, of which Colthup was the sole director.

The regulatory body claims that Colthup misappropriated the funds, allegedly using them to pay off liabilities of ACCE or to purchase cryptocurrency for third parties. The court has adjourned the case to December 16, 2024, allowing for further legal proceedings.

Mine Digital, based in Queensland, went into liquidation on December 1, 2022, following a creditors’ voluntary liquidation process. The platform's downfall was significant enough to prompt liquidator Bradley Tonks from PKF to pursue legal action against Colthup in an attempt to recover losses for creditors.

In a letter to creditors, Tonks indicated that client investments in cryptocurrencies were not properly recorded on the company’s balance sheet. He also noted that substantial digital assets may have been transferred out of the company before its administration, leading to concerns about the financial integrity of Mine Digital.

When Colthup launched Mine Digital in 2019, he aimed to establish a new benchmark in the Australian cryptocurrency sector. The firm initially collaborated with BC Group, a Hong Kong-based blockchain service provider, to offer insured custody and trading solutions among other financial services. However, the recent developments have raised serious questions about the operations and governance of the platform.