Australian Authorities Crack Down on Unlicensed Blockchain Mining Ventures

The Australian Security and Investments Commission (ASIC) has initiated civil proceedings against two Australian cryptocurrency firms, NGS and DCA Capital, after their collapse left investors owed over $160 million.

Following the liquidation of three cryptocurrency mining companies—NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd—hundreds of Australian investors find themselves collectively out of pocket by more than 160 million Australian dollars ($104 million).

ASIC has taken legal action against the companies and their directors, Brett Mendham, Ryan Brown, and Mark Ten Caten, accusing them of targeting local investors to establish self-managed superannuation funds (SMSFs) and funneling the funds into cryptocurrency for investment in blockchain mining packages.

Allegedly, approximately 450 investors entrusted a total of 62 million AUD ($40 million) to these companies, which operated without the required Australian license.

Concerned about the potential dissipation of digital assets invested in blockchain mining, ASIC secured a court order appointing liquidators specifically for the digital currency holdings of the NGS companies. Mendham has been prohibited from leaving Australia.

Moreover, ASIC has taken steps to prevent NGS companies from offering financial services in Australia without proper authorization.

ASIC Chair Joe Longo urged Australians to exercise caution when investing SMSFs in cryptocurrency and reiterated the commission’s commitment to regulating crypto products to safeguard investors.

Meanwhile, DCA Capital, Digital Commodity Assets Pty Ltd, and the Digital Commodity Assets Fund are also facing liquidation and federal court proceedings amid concerns from investors regarding mismanagement and regulatory breaches.

KordaMentha, appointed as liquidators, has uncovered debts amounting to 100 million AUD ($65 million) owed to 100 investors. The federal court has frozen the assets of DCA Capital’s director, Ashod Balanian, totaling 55 million AUD ($36 million), and he has been directed to surrender his passport.

Australian regulators have been increasingly focused on the country’s crypto regulatory landscape, aiming to address consumer protection, market integrity, and encourage financial innovation.

Australia has been identified as a country on the verge of a crypto demand “inflection point,” with stablecoins and favorable policy developments potentially driving a surge in adoption.