Hundreds of Australians have suffered major losses after a Federal Court ordered the liquidation of NGS Crypto and associated companies for operating without a license. More than 450 investors poured $40.2 million into the scheme, but liquidators have found only $4.6 million in cryptocurrency so far.
A Multimillion-Dollar Shortfall
Hundreds of Australians who trusted their retirement savings to a “digital mining” scheme have been left facing deep losses after a Federal Court judge ordered the group to be wound up, revealing a massive shortfall in investor funds. On Dec. 18, Justice Berna Collier ordered the liquidation of NGS Crypto, NGS Group, and NGS Digital, finding the entities had operated a financial services business without a license and acted in “blatant contravention” of the Corporations Act.
Liquidators from advisory firm McGrathnicol have reportedly identified only $4.6 million (approx. $6.88M AUD) in cryptocurrency. This represents a small fraction of the estimated $40.2 million poured into the scheme by more than 450 investors over the last six years. The scheme specifically targeted Australians with self-managed superannuation funds (SMSFs) by promising fixed-rate returns of up to 16% per year through blockchain mining packages marketed as a stable retirement strategy.
Companies involved in the scheme often provided personalized assistance to help investors set up the SMSFs required to facilitate the investment. The Australian Securities and Investments Commission (ASIC) launched an investigation following concerns that investor funds were being improperly handled.
Justice Collier noted that even after becoming aware of ASIC’s concerns, the controllers of NGS Crypto failed to rectify “fatal flaws” in their operations. The Court stated in its decision to appoint McGrathnicol that the scheme’s members have the best chance of recovering at least some of their contributed funds through a liquidation process.
The Search for Missing Assets
While liquidators now have expanded powers to trace the missing millions, the recovery process faces significant hurdles. Rapid swings in the crypto market constantly alter the value of recovered assets, and some identified assets are locked in “ staking” arrangements that may not unlock until 2037. Furthermore, liquidators informed the court that it remains difficult to determine which specific digital assets belong to which individual investor.
Freezing orders remain in place against the companies and their directors, including Ryan Brown, Brett Mendham, and Mark Ten Caten. While Brown was located in Brisbane last year, Ten Caten is believed to be outside of Australia, with some reports suggesting he may be in Bali. Authorities previously seized Mendham’s passport to prevent him from leaving the country. Investors are urged to contact McGrathnicol as the official liquidation process begins.
FAQ 💡
- What happened to NGS Crypto and related firms? A Federal Court ordered their liquidation for running unlicensed financial services.
- How much investor money is missing? Only $4.6M in crypto was found versus $40.2M invested.
- Who was targeted by the scheme? Australians with self‑managed superannuation funds promised returns up to 16% yearly.
- What should investors do now? They are urged to contact McGrathNicol to join the liquidation process.
