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

An Australian court gave the go-ahead for the country’s market watchdog to transfer around US$41 million worth of digital assets belonging to over 450 Australians who invested with NGS, a group of blockchain mining companies. These assets will be managed by three experts from McGrathNicol, a reputable advisory and restructuring firm.

On Friday, ASIC announced that it had initiated civil lawsuits against NGS Crypto, NGS Digital, NGS Group, and their respective directors: Brett Mendham, Ryan Brown, and Mark Ten Caten. Mendham is further prohibited from leaving Australia.

Following ASIC’s accusation that the companies violated Australian law by offering financial services without proper licensing, a court issued an order.

The ASIC claims that NGS Companies entice Australian investors to put money in blockchain mining schemes offering set returns, suggesting they move funds from managed superannuation funds to self-managed ones, which are later converted into cryptocurrencies.

A restructuring firm getting involved doesn’t automatically mean these companies have gone under. ASIC expressed worry that the funds could be in danger of being misused, so they appointed a receiver to safeguard the assets instead.

ASIC is still looking into the matter, but hasn’t called for an immediate ban on the companies yet. Instead, they have requested temporary and permanent injunctions that would stop the firms from carrying out business without a valid license.

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