Approximately 1000 Australian investors have lost over 160 million Australian dollars ($104 million) following the insolvency of three cryptocurrency mining firms, NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd (referred to as “NGS companies” collectively).
Based on a report from April 12, the Australian Securities and Investments Commission (ASIC) initiated civil lawsuits against companies led by Brett Mendham, Ryan Brown, and Mark Ten Caten, as well as their respective directors.
NGS companies face allegations of persuading local investors to set up their own superannuation funds and subsequently transforming these funds into cryptocurrency to invest in blockchain mining deals, which offer guaranteed returns.
Around 450 investors are believed to have put about A$62 million ($40 million) in these companies, yet they didn’t possess the required Australian business license.
The financial regulatory body voiced worries about the vanishing nature of investments in digital assets used for blockchain mining, leading them to request the Federal Court to assign liquidators for the specific digital currencies owned by NGS corporations. Additionally, Mendham is now prohibited from departing Australia.
Furthermore, ASIC has taken steps to stop Non-Bank Financial Services Companies (NGS) from providing financial services in Australia unless they have the necessary permits.
Joe Longo, the chairman of the Australian Securities and Investments Commission (ASIC), urged Australians to think carefully before investing their Self-Managed Super Funds (SMSFs) in cryptocurrencies. He reaffirmed ASIC’s dedication to closely examining crypto products to maintain investor safety through adherence to regulatory standards.
At the same time, other Australian cryptocurrency businesses such as DCA Capital, Digital Commodity Assets Pty Ltd, and the Digital Commodity Assets Fund are going through liquidation and lawsuits in the federal court.
Investor worries over possible mismanagement, missing licenses, and suspected violations of investment scheme rules led to this response.
KordaMentha, serving as liquidators, uncovered a debt of approximately A$100 million ($65 million) that was owed to around 100 investors. The Federal Court ordered the seizure of Ashod Balanian’s assets, valued at about A$55 million ($36 million), and directed him to hand over his passport.
Over the last few months, Australian regulators have been focusing more on establishing clear crypto regulations. On March 21st, ASIC Commissioner Alan Kirkland emphasized the importance of addressing the “regulatory trilemma” for financial innovations such as cryptocurrencies. This means finding a balance between protecting consumers, ensuring market integrity, and fostering financial innovation.
Australia is currently at a significant moment in time when crypto interest is on the rise. Institutional crypto adoption within the country has yet to pick up pace, but the emergence of stablecoins and favorable government policies may ignite a wave of curiosity and investment.
Read More
- LDO PREDICTION. LDO cryptocurrency
- JASMY PREDICTION. JASMY cryptocurrency
- Why iShares’ Bitcoin Trust stock surged 13% in 5 days, and what’s ahead
- Spot Solana ETF approvals – Closer than you think?
- Orca crypto price prediction: Buying opportunity ahead, or bull trap?
- Can Ethereum ETFs outperform Bitcoin ETFs – Yes or No?
- Chainlink to $20, when? Why analysts are positive about LINK’s future
- Citi analysts upgrade Coinbase stock to ‘BUY’ after +30% rally projection
- THETA PREDICTION. THETA cryptocurrency
- Crypto week ahead: Will Bitcoin, Ethereum hit new highs?
2024-04-12 12:37