Former Mine Digital CEO faces charges of embezzlement of more than $1.5 million

Grant Colthup, the former CEO of ACCE Australia, faces a single fraud charge following an investigation by the Australian Securities and Investments Commission (ASIC).

Colthup, who appeared in the Ipswich Magistrates’ Court in Queensland, was charged with embezzling $1.47 million (A$2.2 million) from a client.

$1.5 Million Bitcoin Payment Disappears

From May 2019 to September 2022, ACCE operated a digital asset exchange platform that provided cryptocurrency trading services to customers under the brand “Mine Digital”.

According to a press release, the incident dates back to July 2022, when a customer paid the company $1.5 million to buy Bitcoin but never received the cryptocurrency.

ASIC alleges that instead of delivering the Bitcoin, Colthup used the client’s funds to cover ACCE’s financial debts and purchase cryptocurrency for other clients.

The charge, filed under section 408C of the Queensland Penal Code 1899, carries a maximum sentence of 20 years in prison. The case was adjourned until December 16, 2024 and will be prosecuted by the Office of the Director of Public Prosecutions.

ACCE’s legal issues

This legal development is just one of many controversies that have affected ACCE and Mine Digital. The company collapsed in September 2022, leaving creditors scrambling to recoup about $16 million in owed funds.

The collapse of the Queensland-based exchange was handed to PKF administrator Brad Tonks in September 2022, just weeks before the infamous crash of the US-based exchange FTX.

At the time, a local publication, the Australian Financial Review, reported that Tonks’ subsequent investigations into the company had uncovered troubling financial discrepancies, including limited records, an irregular balance sheet and the existence of just 20,000 $ in assets.

In a statement to creditors, partner PKF noted that substantial digital assets appeared to have been transferred out of ACCE prior to administration, with insufficient records to track the transactions.

“Investments made by clients in digital assets do not appear to have been recorded on the company’s balance sheet,” Tonks reported.

Additionally, the collapse occurred shortly after a dispute with a self-directed retirement fund over a separate $1.6 million investment loss in 2020. The fund alleged that ACCE did not failed to take adequate steps to prevent a social engineering scam known as the “500 Investments.”

Although the exchange defended itself in the matter, the incident contributed to its growing legal challenges.

By December 2022, PKF had been appointed as official liquidator of ACCE and Tonks commenced legal proceedings against Colthup to recover the $16 million owed to creditors.