Unlicensed blockchain mining companies in Australia busted by regulators

Three cryptocurrency mining companies in Australia, NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd, have collapsed into liquidation, leaving over 160 million Australian dollars ($104 million) of investor funds lost. The Australian Security and Investments Commission (ASIC) has taken legal action against the companies and their directors, accusing them of targeting local investors to establish self-managed superannuation funds (SMSFs) and then converting the funds into cryptocurrency for investment in blockchain mining packages. The ASIC claims that approximately 450 investors entrusted a total of 62 million AUD ($40 million) to these companies, which were operating without the necessary Australian license. The ASIC has also expressed concerns about the dissipation of digital assets invested in blockchain mining and has successfully petitioned the Federal Court to appoint liquidators specifically for the digital currency holdings of the NGS companies. In addition, the ASIC has taken steps to prevent NGS companies from offering financial services in Australia without proper authorization. ASIC Chair Joe Longo has warned against investing SMSFs in cryptocurrency and reiterated the commission’s commitment to regulating crypto products to protect investors. Other Australian cryptocurrency entities, including DCA Capital, Digital Commodity Assets Pty Ltd, and the Digital Commodity Assets Fund, are also facing liquidation and federal court proceedings due to concerns over mismanagement and potential breaches of regulations. KordaMentha, appointed as liquidators, has found debts totaling 100 million AUD ($65 million) owed to 100 investors. The federal court has frozen the assets of DCA Capital’s director and instructed him to surrender his passport. Australia’s regulators have been focusing more on the country’s crypto regulatory landscape recently, with an emphasis on consumer protection, market integrity, and encouraging financial innovation. Despite the demand for institutional crypto in Australia still lagging behind, the country has been described as being at an “inflection point” for crypto demand, with the potential for growth due to stablecoins and favorable policy moves.