Australian Court Hands Over $41 Million of Crypto Held by Blockchain Mining Group at Regulator’s Request

Australia’s market regulator opened civil proceedings against the NGS group of blockchain mining companies.

About US$41 million in digital assets invested with the companies by more than 450 Australians has been handed to restructuring specialists.

The Australian Securities and Investment Commission alleges the companies broke the law and provided financial services without the appropriate license.

An Australian Federal Court agreed to a petition from the nation’s market regulator to hand over approximately US$41 million in digital assets invested by over 450 Australians with the NGS group of blockchain mining companies to three specialists from McGrathNicol, an independent advisory and restructuring company.

The Australian Securities and Investment Commission (ASIC) said on Friday that it had commenced civil proceedings against NGS Crypto, NGS Digital and NGS Group and the sole directors of the companies: Brett Mendham, Ryan Brown and Mark Ten Caten, respectively. Mendham is also restrained from traveling outside of Australia.

The court order came after ASIC alleged the companies breached Australian law and provided financial services without an Australian financial services license.

“ASIC alleges that the NGS Companies target Australian investors to invest in blockchain mining packages with fixed-rate returns, encouraging them to use funds transferred from regulated super funds to self-managed super funds (SMSFs) and then converted into cryptocurrency,” the regulator said.

The involvement of a restructuring company does not necessarily suggest the companies have collapsed. ASIC said it was concerned the funds were at risk of dissipation and appointing a receiver was the best way to protect the assets.

While it continues to investigate, ASIC has not sought an outright ban on the companies but only interim and final injunctions preventing them from operating without a license.

The NGS companies did not immediately respond to a CoinDesk request for comment.

Read More: Australian Judge Hands Split Decision in Market’s Regulator vs Block Earner

Source