Australia’s ASIC launches legal action against unlicensed mining firms

Australian Securities and Investments Commission (ASIC) has launched legal proceedings against three blockchain mining companies after their collapse into liquidation. The companies, NGS Crypto Pty Ltd, NGS Crypto Pty Ltd, and NGS Crypto Ltd under the NGS Companies banner have cost residents in the country more than $104 million in losses.

Australia’s ASIC launches legal action against unlicensed firms

According to the report, legal actions were taken against the companies and their directors. The NGS companies and their directors Brett Mendham, Ryan Brown, and Mark Ten Caten have been charged with targeting residents to set up self-managed superannuation funds (SMSF). These funds are then converted into crypto and used to buy mining packages for fixed-rate returns at a later date.

The regulatory agency clarified that about 450 investors had been scammed of about $40 million. The agency also noted that the NGS companies operated in the country without a valid license. The Australian ASIC has also expressed worries over the potential theft of the cryptocurrencies used to purchase the mining packages. This is why it urged the court to appoint liquidators specially for the crypto holdings of the NGS companies. One of the directors Brett Mendham has also been restricted from leaving Australia.

Regulatory concerns and industry impact

The ASIC also asked for an order to stop the companies from operating in the country without licenses. ASIC Chairman Joe Long also warned Australians about the dangers of investing their SMSFs in crypto products. He urged them to be careful of the risks while assuring them of the agency’s efforts towards protecting them and overseeing crypto products to ensure regulatory compliance.

Recently appointed liquidator KordaMentha has announced debts totaling around $65 million owed to about 100 investors. In turn, the court has ordered the seizure of DCA Capital’s boss Ashod Balanian’s passport while freezing his assets worth $36 million. Australia has been battling to solve regulatory issues in the country with a recent comment from ASIC Commissioner Alan Kirkland noting the need to solve the regulatory challenges.

This story was sourced from MichaelWestMedia.