- Australian court transfers $41 million in digital assets to protect against dissipation.
- ASIC alleges NGS Companies operated without financial licenses and violated laws.
- ASIC initiated civil actions against NGS companies and their directors.
The Federal Court of Australia, responding to a request by the country’s market regulator, authorized the transfer of about US$41 million in digital assets from over 450 Australian investors involved with the NGS blockchain mining companies to three experts from McGrathNicol, an independent advisory and restructuring firm.
The Australian Securities and Investment Commission (ASIC) announced that it had initiated civil actions against NGS Crypto, NGS Digital, and NGS Group, as well as their sole directors Brett Mendham, Ryan Brown, and Mark Ten Caten.
Furthermore, Mendham has been barred from leaving Australia. The decision was made following ASIC’s accusation that the companies operated without a necessary Australian financial services license and violated national laws.
ASIC claims that the NGS Companies enticed Australian investors to invest in blockchain mining packages offering fixed returns, advising them to shift funds from regulated super funds to self-managed super funds (SMSFs), which were then converted into cryptocurrencies.
“ASIC alleges that the NGS Companies target Australian investors to invest in blockchain mining packages with fixed-rate returns, encouraging them to use funds transferred from regulated super funds to self-managed super funds (SMSFs) and then converted into cryptocurrency.”
Australian Securities and Investment Commission (ASIC)
The appointment of a restructuring company by the court does not imply that the companies have failed. Instead, ASIC appointed the firm because of concerns that the assets were at risk of being dispersed.
ASIC believes that appointing a receiver is the most effective method to safeguard these assets. As the investigation proceeds, ASIC has not requested a complete prohibition on the companies’ operations but has sought both interim and permanent injunctions to prevent them from conducting business without the appropriate licenses. The NGS companies have yet to respond to a request for comment from CoinDesk.
