Australian regulators have taken action against two cryptocurrency mining companies, resulting in significant financial losses for investors. The Australian Security and Investments Commission (ASIC) has filed civil proceedings against NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd, collectively known as the “NGS companies”, after they went into liquidation, leaving investors with a loss of over A$160 million.
The issue stems from the NGS companies’ practice of encouraging local investors to establish self-managed superannuation funds (SMSFs), which were then converted into cryptocurrency for investment in blockchain mining packages. Approximately 450 investors trusted A$62 million to these companies based on promises of fixed-rate returns, despite the companies operating without the necessary Australian financial services license.
In response, the ASIC sought intervention from the Federal Court to appoint liquidators for the NGS companies’ digital currency holdings in order to protect investors’ assets. This case underscores the regulatory challenges facing the cryptocurrency mining sector and highlights the Australian government’s commitment to regulating cryptocurrency and protecting investors, as evidenced by the restrictions placed on key figures and measures to prevent the NGS companies from offering unlicensed financial services.