NGS Crypto in happier times

NGS Crypto Pty Ltd, an Australian digital asset investment firm based in Sydney, and two of its senior executives, Brett Mendham and Ryan Brown, have faced civil penalty proceedings from the Australian Securities and Investments Commission (ASIC) for alleged breaches of financial services laws. The announcement was made by ASIC on March 23, 2023.

According to ASIC's statement, NGS Crypto and its executives have been accused of providing financial services without holding an Australian Financial Services License (AFSL) or an appropriate exemption. The company is also alleged to have taken deposits from retail clients without a proper disclosure document or a Product Disclosure Statement (PDS).

ASIC's investigation began in late 2022 after receiving reports from concerned investors regarding potential misconduct by NGS Crypto. The regulator's concerns were further heightened when it was discovered that the firm had been actively soliciting new clients and investing other people's money without proper authorization.

Brett Mendham, who is listed as a director of NGS Crypto on the company's website, is also a well-known figure in the Australian cryptocurrency community. He is a co-founder of Blockchain Australia, a national industry association for blockchain technology and digital assets. Ryan Brown is listed as a co-founder and the Chief Operating Officer of NGS Crypto.

NGS Crypto's website states that it offers a range of services, including digital asset trading, portfolio management, and education. The company claims to have a team of experienced traders and investment professionals who use a data-driven approach to managing digital assets.

ASIC's statement did not provide any details about the number of investors affected or the total amount of funds involved in the alleged breaches. The regulator has issued a ban on NGS Crypto from providing financial services to retail clients while the investigation is ongoing.

ASIC's action against NGS Crypto and its executives is a reminder of the importance of complying with financial services laws, particularly in the rapidly evolving digital asset space. The regulator has taken a tough stance against unlicensed activities and non-compliance with disclosure requirements in recent years.

NGS Crypto and its executives have 28 days from the date of ASIC's statement to respond to the allegations and provide any evidence they may have to refute the claims. If found guilty of the alleged breaches, they could face significant fines and other penalties.

Investors who have concerns about their investments with NGS Crypto are encouraged to contact ASIC's MoneySmart Service on 1300 901 275 or visit the MoneySmart website for more information.

This is a developing story and further updates will be provided as more information becomes available.