ob体育 has commenced civil proceedings against blockchain mining companies NGS Crypto Pty Ltd, NGS Digital Pty Ltd and NGS Group Ltd (NGS Companies) and the sole directors of those respective companies, Brett Mendham, Ryan Brown and Mark Ten Caten.
On 10 April 2024, the Federal Court made orders appointing Anthony Connelly, Kathy Sozou, and Jamie Harris of McGrathNicol as receivers over the digital currency assets of the NGS Companies and of Mr Mendham, Mr Ten Caten and Mr Brown.听 ob体育 applied for these orders because it is concerned that the digital assets of investors, which are invested in the blockchain mining products offered by the NGS Companies, are at risk of dissipation and considered the appointment of a receiver was the best way to protect the assets.
The Court also made orders restraining Mr Mendham from travelling outside of Australia.
ob体育 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. ob体育鈥檚 preliminary investigations indicate over 450 Australians invested approximately USD$41 million through the NGS Companies.
ob体育 alleges in the proceedings that the NGS Companies contravened section 911A of the Corporations Act by providing financial services without an Australian financial services licence. As part of the proceedings ob体育 is also seeking interim and final injunctions against the NGS Companies preventing them from providing financial services in Australia without an Australian financial services licence.
ob体育 Chair Joe Longo said, 鈥楢ustralians who decide to self-manage their super should consider the risks before using their SMSF to invest in crypto related investment products such as blockchain mining. These proceedings should also send a message to the crypto industry that products will continue to be scrutinised by ob体育 to ensure they comply with regulatory obligations in order to protect consumers.鈥�
Investors can contact the receivers with any queries by emailing: [email protected].
ob体育鈥檚 investigation into the NGS Companies and their directors is otherwise continuing. ob体育 provides regular updates on this matter on its NGS Crypto Companies 辫补驳别.听
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Editor's Note 1:
The matter was listed for a case management hearing on 16 May 2024.
Orders providing for the filing of various applications were made with hearings listed for 12 June and 16 July 2024.
ob体育鈥檚 application for an interim injunction is listed for a one-day hearing on 29 July 2024.
Editor鈥檚 Note 2:
On 12 June 2024, the Federal Court heard an application of NGS Group Limited and Mark Ten Caten to set aside the orders preserving the digital currency assets of the defendants.
Editor鈥檚 Note 3:
On 12 July 2024, the Federal Court vacated the hearing listed for 16 July 2024. The matter is next listed to be heard on 29 July 2024.
Editor鈥檚 Note 4:
On 25 July 2024, Justice Collier delivered judgment refusing the application of NGS Group Limited and Mark Ten Caten to set aside the orders preserving the digital currency assets of the defendants. The Federal Court also vacated the hearing of ob体育鈥檚 application for an interim injunction listed for 29 July 2024. The matter is next listed to be heard for a case management hearing on 5 August 2024.
Editor's Note 5:听
On 6 August 2024, the Federal Court made orders including an order listing ob体育鈥檚 application for interim injunctions for a hearing on 10 September 2024. The Federal Court did so upon undertakings provided to the Court by NGS Group Ltd, NGS Crypto Pty Ltd and NGS Digital Pty Ltd, including an undertaking, until excused by order of the Court, that they will not carry on a financial services business in Australia in contravention of section 911A of the Corporations Act (, including the terms of the undertakings).
Editor鈥檚 Note 6: 听
On 9 September 2024, the Federal Court made consent orders granting ob体育鈥檚 application for an interim injunction restraining the NGS Companies from, amongst other things, carrying on a financial services business in Australia, from promoting or issuing their blockchain mining packages to any new investors, and from dealing with investor funds, until further order of the Court. The matter is next listed for a case management hearing on 23 October 2024. A copy of the Court鈥檚 Order is available .听听
Editor's Note 7:
On 22 October 2024, the Federal Court vacated the case management hearing on 23 October 2024. The matter is next listed for a case management hearing on 2 December 2024.
Editor's Note 8:
On 29 November 2024, ob体育 amended its claim to seek orders winding up NGS Group Ltd, NGS Crypto Pty Ltd, and the unregistered managed investment scheme ob体育 alleges that NGS Group Ltd operated. ob体育 seeks orders appointing liquidators to these entities and the alleged scheme. ob体育 has taken this step as it considers that winding up orders and the appointment of liquidators are the best way to facilitate an orderly resolution of the companies鈥� affairs in Australia and the distribution of any assets recovered by the liquidators, including those currently held by the receivers, back to investors.
Editor's Note 9:
On 2 December 2024, the Federal Court listed the proceedings for a final hearing on 22, 23 and 24 July 2025. The matter will be listed for a case management hearing after 9 May 2025.