Grant Cultho, the former CEO of Australian cryptocurrency exchange Mine Digital, appears to be facing legal trouble. According to A press releaseColthu is now facing fraud charges for allegedly embezzling US$1.47 million (AU$2.2 million) from a client.
The statement revealed that the customer intended to use the funds to purchase Bitcoin, but the cryptocurrency was never delivered.
The alleged case
In a statement issued earlier today, the Australian Securities and Investments Commission (ASIC) confirmed the allegations against Coltho, noting that the funds were transferred to his company, Mine Digital’s parent company, ACCE Australia, but were diverted for other purposes.
Following an investigation by ASIC, the former CEO of cryptocurrency exchange Mine Digital has been charged with fraud in relation to a $2.2 million transaction. https://t.co/tHrFgaHiSD
— ASIC Media (@asicmedia) October 21, 2024
ASIC alleges that Colthup used client funds to cover ACCE liabilities, purchase cryptocurrency for other clients, or both. The statement stated:
Between May 2019 and September 2022, ACCE operated a digital asset exchange platform and provided cryptocurrency trading services to clients under the name “Mine Digital”. ASIC alleges that a client of Mine Digital paid $2.2 million to ACCE for Bitcoin and received no cryptocurrency in return. ASIC alleges that Colthup used the funds to pay ACCE liabilities and/or purchase cryptocurrency for others.
It is worth noting that these accusations come in the wake of the collapse of Mine Digital in September 2022, which made creditors seek to recover the lost funds, estimated at approximately $15 million.
Judgment
When Colthup embezzled client funds, bitcoin was trading between $18,000 and just over $24,000.
Although the customer never received the Bitcoin as he was supposed to, if the customer had received it as intended, the value of his cryptocurrency would have increased significantly.
With Bitcoin trading at more than $65,000, the value of the investment will triple. At the same time, the fact that the client’s intended investment could have grown significantly increased the seriousness of the allegations.
Currently, the case against Colthup was heard in the Magistrates Court in Ipswich, Queensland, Australia, on Monday (October 21), and has been postponed to December 16. Colthup could face a maximum sentence of 20 years in prison if found guilty under Section 408C. Of the Queensland Criminal Code 1899.
Mine Digital, once a prominent cryptocurrency exchange in Australia, collapsed amid financial difficulties two years ago. The latest fraud allegations against Colthup are just one of many accusations surrounding the company since it went out of business.
In 2022, so was the now-defunct company File a lawsuit against For “not doing enough to remove scammers from its platform.”
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