ASIC focuses on cryptocurrency companies in response to $160m loss suffered by investors.
Australian investors have suffered significant losses of over 160 million Australian dollars ($104 million) due to the collapse of three cryptocurrency mining companies known as the “NGS companies.” The Australian Securities and Investments Commission (ASIC) has taken legal action against these companies and their directors, accusing them of misleading investors by promising fixed-rate returns on blockchain mining investments. The ASIC claims that around 450 investors invested approximately 62 million AUD ($40 million) in these companies without the necessary financial license. Concerned about the risk of losing digital assets, the commission obtained a court order to appoint liquidators to oversee the cryptocurrencies held by the NGS companies. ASIC Chair Joe Longo has warned investors about the risks of investing in cryptocurrencies and emphasized the commission’s commitment to regulating crypto offerings. Other cryptocurrency organizations in Australia, including DCA Capital and Digital Commodity Assets, are also facing liquidation and legal action due to concerns about mismanagement and regulatory violations. The liquidator, KordaMentha, has discovered debts of 100 million AUD ($65 million) owed by these firms to investors. The Federal Court has frozen assets worth 55 million AUD ($36 million) belonging to the director of DCA Capital and ordered him to surrender his passport. In addition to the NGS companies, ASIC is also appealing a court decision to dismiss its civil penalty lawsuit against Finder Wallet, a subsidiary of digital currency exchange Finder.com. The court ruled that Finder Wallet’s investment product did not require an Australian Financial Services license, leading to the lawsuit’s dismissal. Finder Wallet has defended its product and expressed willingness to engage with ASIC. This appeal is part of ASIC’s new strategy to pursue riskier litigation cases in the cryptocurrency sector to ensure regulatory compliance.
