ASIC Granted Permission to Appoint Receivers for Collapsed Crypto Mining Companies in Australia

ASIC Granted Permission to Appoint Receivers for Collapsed Crypto Mining Companies

In a significant development in the world of cryptocurrency, the Australian Securities and Investments Commission (ASIC) has been granted permission by a Federal Court to appoint receivers for digital assets held by a group of collapsed crypto mining companies and their sole owners. The court order comes after ASIC initiated civil proceedings against three crypto-mining firms collectively known as NGS Companies, as well as their directors Brett Mendham, Ryan Brown, and Mark Ten Caten.

The collapse of these crypto mining companies has left investors in the red by more than $41 million, with allegations of targeting investors to establish self-managed super funds (SMSFs) and then converting them into cryptocurrency. ASIC has accused the NGS Companies of violating financial regulations by providing services without the necessary Australian financial services license.

In addition to the NGS Companies, three other crypto funds in Australia have been forced into liquidation, potentially owing investors more than $150 million. KordaMentha has been appointed as liquidators by a Federal Court to investigate and uncover additional investors in these firms.

ASIC Chair Joe Longo emphasized the importance of protecting consumers and ensuring compliance within the crypto industry. The actions taken by ASIC serve as a message to the crypto industry about the regulatory oversight and obligations that need to be adhered to in order to protect investors.

The appointment of receivers by ASIC for the digital assets of collapsed crypto mining companies represents a significant step in addressing the issues faced by investors who have suffered losses. The regulatory actions taken by ASIC underscore the importance of compliance with financial regulations and the need to protect investors from potential risks associated with investing in cryptocurrencies. The liquidators appointed to investigate the collapsed crypto funds aim to uncover the extent of investor losses and determine the appropriate course of action to address the situation.