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The Australian Securities and Investments Commission (ASIC) has received approval from a Federal Court to appoint receivers for the digital assets owned by a group of failed cryptocurrency mining companies and their sole proprietors.
ASIC Takes Action Against Failed Crypto Mining Firms
ASIC initiated civil legal action against three cryptocurrency mining companies, collectively referred to as NGS Companies. The legal action also involved the directors of these mining operations: Brett Mendham, Ryan Brown, and Mark Ten Caten.
We have initiated civil proceedings against #blockchain mining companies NGS Crypto, NGS Digital, and NGS Group – along with their directors – for allegedly offering financial services without a license https://t.co/Hgwk81V5TD pic.twitter.com/XpKcXCBZxt
— ASIC Media (@asicmedia) April 12, 2024
As per a statement from ASIC on Friday, the court order also prohibited Brett Mendham from leaving Australia. The regulator sought these orders due to concerns that investors in these cryptocurrency mining operations “are at risk of dissipation.”
Crypto Mining Failure Leaves Investors $41 Million in Losses
The cryptocurrency mining firms entered liquidation, owing over USD $41 million to 450 investors. The companies allegedly approached investors to set up self-managed super funds (SMSFs) and subsequently converted these into cryptocurrency.
“ASIC claims in the proceedings that the NGS Companies violated section 911A of the Corporations Act by providing financial services without an Australian financial services license,” the statement indicated.
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The regulator is now holding the companies responsible for unlawfully promoting investment products associated with cryptocurrency mining.
ASIC Chair Joe Longo cautioned investors to assess risks before utilizing their SMSF for investments in cryptocurrency-related ventures such as mining.
“These proceedings should also convey a message to the cryptocurrency sector that products will continue to be examined by ASIC to ensure compliance with regulatory requirements to safeguard consumers,” he stated.
Three Additional Crypto Funds Enter Liquidation in Australia
Alongside NGS Companies, other cryptocurrency funds in Australia – DCA Capital, Digital Commodity Assets, and the Digital Commodity Assets Fund – have also been compelled into liquidation.
Following the collapse of these cryptocurrency funds within a week, the schemes may owe investors more than $150 million. A Federal Court has appointed liquidators from KordaMentha to the three firms operated by Balanian that provided cryptocurrency investments.
Moreover, liquidators are assigned to investigate and identify additional investors. Despite the allegations, the Balanian team has not yet provided a response.
The post Australian Crypto Mining Companies Collapse into Liquidation Owing 450 Investors appeared first on Cryptonews.
