ASIC is conducting an investigation into blockchain mining companies NGS Crypto Pty Ltd, NGS Digital Pty Ltd and NGS Group Limited (a company domiciled in Hong Kong) (together, the NGS Companies) and their officers, employees, agents, representatives, or associated entities.
ASIC’s investigation arose from concerns including that:
the NGS Companies received funds from Australian investors and those funds may have been improperly dealt with,
the NGS Companies may have been operating a financial services business without an Australian Financial Services Licence (AFS Licence).
As at 1 July 2024, NGS Crypto’s website https://ngscrypto.com/redirects to the website https://hiddup.com/. Hiddup’s website states that NGS Crypto has rebranded to Hiddup.
On 12 August 2024, NGS Digital Pty Ltd was placed into liquidation.
ASIC will update this webpage when important steps take place in relation to this matter.
Updates
Federal Court Proceedings
On 9 April 2024, ASIC applied for interim ex parte orders in the Federal Court to secure the digital assets of the NGS Companies and their directors, Mr Mark Ten Caten, Mr Brett Mendham and Mr Ryan Brown as well as travel restraint orders in relation to Mr Mendham (24-073MR).
ASIC also seeks in the proceeding:
Declarations that the NGS Companies have contravened s 911A of the Corporations Act by carrying on a financial services business without an AFSL,
Interim and final injunctions against the NGS Companies.
ASIC's application for interim injunctions
On 9 September 2024, the Federal Court made consent orders granting ASIC’s 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 (Interim Injunction).
The NGS Companies consented to the Interim Injunction. ASIC sought the Interim Injunction to prevent the NGS Companies from carrying on an unlicensed financial services business until the final hearing of the matter.
The injunctions restrain the NGS Companies until further order of the Court.
The Interim Injunctions are not a finding that the NGS Companies have broken the law or that any part of their businesses contravenes the law, as alleged by ASIC in the proceeding (Court’s Order).
The Federal Court vacated the hearing listed for 10 September 2024 and the matter is next listed for a case management hearing on 23 October 2024.
Application to discharge asset preservation orders refused by the Court
On 25 July 2024, Justice Collier delivered judgment refusing an application by NGS Group Limited and Mark Ten Caten to set aside the orders preserving the digital currency assets of the defendants. This means that the asset preservation orders obtained by ASIC, including the appointment of the receivers, continue.
Appointment of receivers
On 10 April 2024, the Federal Court made interim orders that receivers be appointed over the digital assets of the NGS Companies, Mr Mark Ten Caten, Mr Brett Mendham and Mr Ryan Brown. Their role initially is to secure the digital assets for investors.
Anthony Norman Connelly, Katherine Sozou and William James Harris of McGrath Nicol were appointed as receivers and managers.
McGrath Nicol have published updates with respect to their activities on 11 April 2024 and 23 August 2024.
The Interim Injunction does not affect the appointment of the receivers.
Information for investors
Next steps for investors
ASIC’s investigation is ongoing.
People wishing to provide information to ASIC are invited contact the investigation team via email at NGS.Investigation@asic.gov.au. A member of the team will respond as soon as possible.
