Based on local news sources, the Australian Securities and Investment Commission (ASIC) has initiated legal actions against two cryptocurrency firms and their leaders for conducting business without a license within Australia. It is claimed that these companies were involved in an intricate scam leading to a financial loss of approximately AU$ 160 million or equivalent to US$ 104 million for investors.
ASIC After Unlicensed Mining Companies
The Australian regulatory authority initiated civil lawsuits against NGS Group’s companies – NGS Crypto, NGS Digital, and NGS Group – as well as their directors: Brett Mendham, Ryan Brown, and Mark Ten Caten.
According to ASIC, the NGS firms are suspected of approaching Australian investors to purchase blockchain mining packages with guaranteed returns. Additionally, ASIC claims that these firms reportedly urged investors to utilize self-managed super funds (SMSFs) and transform the funds into cryptocurrency.
Based on information from the NGS Crypto website, the business was established in 2018 with a focus on blockchain technology. As a subsidiary of the NGS Group, its objective is to assist members in earning regular profits.
In simpler terms, the Australian regulatory body announced that certain financial services offered by NGS Companies were unlicensed. As a result, ASIC intends to request both temporary and permanent restraining orders against these companies.
Joe Longo, the chairman of the Australian Securities and Investments Commission (ASIC), advises Australians to carefully assess the risks associated with managing their Self-Managed Super Funds (SMSFs) on their own before investing in crypto-related products, such as those provided by NGS Group.
In addition, the Chair of ASIC (Australian Securities and Investments Commission) cautioned the crypto industry that regulatory scrutiny of their products would be rigorous.
The crypto industry should receive the following message from these proceedings: ASIC will rigorously examine crypto products to uphold regulatory requirements, thereby safeguarding consumers.
The Australian regulatory body asked the Federal Court to appoint liquidators who would manage the digital assets of the failed companies. This action was taken due to concerns that the value of the investors’ assets could be lost or wasted.
On Wednesday, the court granted the application and stopped Mendham from traveling abroad. Preliminary probes showed that around 450 Australians had put in about $62 million, or roughly $41 million, into the NGS Companies.
Crypto Funds Busted For Irregularities
Approximately 100 investors stand to lose over AUD$ 100 million, equivalent to about $64.6 million, from the failed businesses DCA Capital, Digital Commodity Assets, and the Digital Commodity Assets Fund.
Lately, investigations ensued following accusations from investors against crypto funds managed by Ash Balanian, a supposed ex-NASA mission scientist. Consequently, liquidators have been assigned to the three firms overseen by Balanian.
According to the findings in the report, this fund was specifically designed for affluent individuals with an initial investment of AU$ 50,000. However, suspicious activities were uncovered in the fund’s administration, prompting regulatory intervention.
Many investors expressed worry since the funds did not have the necessary licenses and allegedly violated the regulations for managed investment schemes.
On Wednesday, an Australian court issued orders freezing Balanian’s assets valued at AU$55 million and required him to surrender his passport as a crypto fund manager.
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2024-04-13 06:11