The Australian Securities and Investments Commission (ASIC) has taken action against a former crypto exchange executive for fraud. According to the announcement today (Tuesday), the regulator charged Grant Colthup, the ex-CEO of ACCE Australia, which operated the Mine Digital crypto exchange, with the theft of AU$2.2 million (about US$1.5 million) from one of the customers.
The regulator charged Colthup with one count of fraud, and he appeared in court yesterday (Monday). The case has been adjourned to 16 December 2024. Notably, the proceedings against Colthup came after a regulatory investigation.
Paying Liabilities with Customer’s Money
ACCE operated a cryptocurrency exchange under the trade name Mine Digital between May 2019 and September 2022. The regulatory actions were based on a complaint from one of the exchange’s customers, who deposited AU$2.2 million to purchase Bitcoin but never received any cryptocurrency in return.
According to the Australian regulator, Colthup used the funds to pay ACCE's liabilities and/or to purchase cryptocurrency for others.
Interestingly, ACCE entered liquidation on 23 September 2022, and Brad Tonks of PKF was appointed liquidator on 1 December 2022.
ASIC against Crypto
The action against Colthup came after ASIC failed to impose a penalty on Block Earner, another cryptocurrency company offering interest-bearing products. The courts ruled in favour of Block Earner, stating that the company acted honestly and not carelessly when offering those products, despite ASIC’s argument that it needed a financial services licence.
Finance Magnates recently reported that Australian regulators are drafting updated guidance requiring cryptocurrency exchanges to obtain financial services licences. This will expand the current licensing requirements, which primarily apply to digital currency exchanges.
Meanwhile, an amendment to Australian legislation also extended ASIC's powers to oversee a range of capital markets entities, including financial market operators, benchmark administrators, clearing and settlement facilities, and derivative trade repositories.
