The Australian Securities and Investments Commission (ASIC) has commenced civil proceedings against blockchain mining companies NGS Crypto Pty Ltd, NGS Digital Pty Ltd and NGS Group Ltd (NGS Companies) and the sole directors of those respective companies, Brett Mendham, Ryan Brown and Mark. Ten Caten.
On 10 April 2024, the Federal Court made orders appointing Anthony Connelly, Kathy Sozou and Jamie Harris of McGrathNicol as receivers of the digital currency assets of NGS Companies and Messrs Mendham, Ten Caten and Brown.
ASIC applied for these orders because it is concerned that investors’ digital assets, which are invested in the blockchain mining products offered by NGS companies, are at risk of being liquidated, and felt that appointing a receiver was the best way to protect assets.
The Court also made orders banning Mr Mendham from traveling outside Australia.
ASIC alleges NGS Companies are targeting Australian investors to invest in blockchain mining packages with fixed interest returns, encouraging them to use funds transferred from regulated super funds to self-managed super funds (SMSFs) and then converted into cryptocurrencies.
ASIC’s preliminary investigations show that more than 450 Australians invested approximately US$41 million through NGS companies.
The regulator alleges in the proceedings that the NGS companies breached section 911A of the Corporations Act by providing financial services without an Australian financial services licence. As part of the process, ASIC is also seeking interim and final injunctions against NGS Companies that prevent them from providing financial services in Australia without an Australian financial services licence.
Investors may contact the recipients with any queries by emailing: ngscrypto@mcgrathnicol.com.
Otherwise, ASIC’s investigation into NGS Companies and their directors is ongoing.