Approximately 160 million Australian dollars ($104 million) were lost by hundreds of Australian investors after the bankruptcy of three cryptocurrency mining firms: NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd. These companies, referred to as “NGS companies,” have collectively faced liquidation.
On April 12, it was disclosed that the Australian Securities and Investments Commission (ASIC) took legal action against NGS Companies and their top executives – Brett Mendham, Ryan Brown, and Mark Ten Caten.
Local investors are encouraged by these firms to establish their own self-managed superannuation funds (SMSFs) and channel the investments into blockchain mining deals, with guarantees of regular returns.
About 450 investors are estimated to have invested roughly 62 million Australian dollars (around $40 million) with these companies, yet they did not hold a valid Australian financial license.
The commission expressed great worry over the potential loss of digital assets used in blockchain mining and secured a Federal Court decree, designating liquidators to handle the NGS firms’ digital currencies. Furthermore, Mendham was prohibited from traveling.
Additionally, ASIC is taking action against NGS firms that break the law by offering financial services in Australia without proper authorization.
Joe Longo, chair of the Australian Securities and Investments Commission (ASIC), cautioned Australians against investing Self-Managed Super Funds (SMSFs) in cryptocurrencies. He underscored ASIC’s commitment to scrutinizing crypto offerings rigorously to ensure they adhere to regulations and safeguard investors.
At the same time, companies like DCA Capital, Digital Commodity Assets Pty Ltd, and the Digital Commodity Assets Fund – significant players in the Australian cryptocurrency sector – are going through liquidation processes and dealing with lawsuits in federal courts.
Worries among investors regarding potential mishandling of funds, insufficient licenses, and suspected breaches of rules governing managed investment schemes have led to these actions being initiated.
KordaMentha, as the appointed liquidator, uncovered a debt totaling 100 million AUD ($65 million) owed by these companies to 100 investors. The Federal Court took action by freezing assets valued at 55 million AUD ($36 million), which are linked to Ashod Balanian, the DCA Capital director. Additionally, the court instructed Balanian to surrender his passport.
After new laws affecting Non-Governmental Companies (NGS) came into effect, the Australian Securities and Investments Commission (ASIC) is now challenging a Federal Court ruling on Finder Wallet Pty Ltd’s case. Previously, the court had rejected ASIC’s claim for penalties against Finder Wallet, a subsidiary of digital currency exchange Finder.com.
From late February to November 10, 2022, Finder Wallet provided an investment service called Finder Earn. However, the Australian Securities and Investments Commission (ASIC) alleged that the company was functioning without a valid Australian Financial Services license and breached several regulatory requirements.
On March 14, 2024, Judge Brigitte Markovic determined that the Finder Earn product did not meet the requirements to be classified as a debenture under the Corporations Act. Consequently, the court dismissed the ensuing lawsuit.
The representative from Finder Wallet spoke to Crypto.news in reaction to the request, sharing that their team has been proactively suggesting regulations and maintaining ongoing communication with ASIC during the regulatory development.
At the court hearing, Finder Wallet strongly argued for their product, reminding the judges that the original decision was made after thorough review of all available evidence, which would stay the same during the appeal process.
The company acknowledged ASIC’s challenging situation and pledged to continue collaborating in a positive manner. Furthermore, they reinforced their devotion to inventive solutions, stressing that their item was crafted with the consumers’ welfare as its top priority.
ASIC’s latest approach involves taking on more challenging legal battles in the cryptocurrency industry, understanding that there may be potential losses, to maintain robust regulatory oversight.
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2024-04-12 15:56