The Australian Securities and Investments Commission (ASIC) recently obtained court approval to appoint receivers for digital assets held by a group of collapsed crypto mining companies and their owners, Brett Mendham, Ryan Brown, and Mark Ten Caten. These companies, collectively known as NGS Companies, are accused of providing financial services without a license, resulting in losses of over $41 million to 450 investors. ASIC has warned investors to be cautious when using self-managed super funds to invest in crypto-related products.
In addition to NGS Companies, other crypto funds in Australia, including DCA Capital, Digital Commodity Assets, and the Digital Commodity Assets Fund, have also been forced into liquidation. These funds, operated by Balanian, potentially owe more than $150 million to investors. Liquidators have been appointed to investigate further and uncover more investors as the allegations against these firms continue to be addressed. Despite the accusations, the Balanian team has not yet responded to the situation.
The collapse of these crypto mining companies and funds has led to significant losses for investors, highlighting the risks associated with investing in the crypto industry. ASIC is taking action to hold these companies accountable for their alleged illegal activities and is continuing to investigate and scrutinize other crypto-related products to protect consumers. The court order obtained by ASIC includes restraining Brett Mendham from leaving Australia, as the regulator believes investors in these schemes are at risk of further loss.
ASIC’s civil proceedings against the NGS Companies and their directors aim to address the violations of financial services regulations under the Corporations Act. The regulator alleges that the companies illegally marketed investment products backed by cryptocurrency without the required Australian financial services license. By taking legal action against these entities, ASIC hopes to send a message to the crypto industry about the importance of complying with regulatory obligations to safeguard consumers and prevent future instances of financial misconduct.
Investors who were targeted by the NGS Companies and other collapsed crypto funds are facing significant financial losses, prompting ASIC to step in and take appropriate action. Liquidators appointed to these firms are tasked with investigating the extent of the losses and identifying additional investors who may have been affected. As the investigations continue, ASIC and other regulatory bodies in Australia are working to ensure that the crypto industry adheres to legal and regulatory standards to protect investors and prevent similar collapses and financial losses in the future.
