NGS Crypto in happier times

NGS Crypto Pty Ltd is an Australian digital asset investment firm based in Sydney that was founded in 2017. The company specializes in providing investment services related to cryptocurrencies and blockchain technology. The company's senior executives include Brett Mendham, who serves as the Managing Director, and Ryan Brown, who is the Chief Operating Officer.

In March 2023, the Australian Securities and Investments Commission (ASIC) announced that it had initiated civil penalty proceedings against NGS Crypto, Mendham, and Brown for alleged breaches of financial services laws. The regulator accused the firm of providing financial services without holding an Australian Financial Services License (AFSL) or an appropriate exemption.

According to ASIC's statement, NGS Crypto had offered and sold cryptocurrency-related products to retail clients without proper authorization. The regulator also alleged that the firm had misrepresented the risks associated with investing in cryptocurrencies and failed to provide clients with adequate disclosures.

ASIC's statement further revealed that the regulator had received several complaints from investors who had lost significant sums of money investing with NGS Crypto. The regulator's investigation found that the firm had received over AUD 10 million (approximately USD 7 million) from more than 100 retail clients since 2018.

NGS Crypto had marketed itself as a "digital asset investment fund" that aimed to provide investors with exposure to a diversified portfolio of cryptocurrencies. However, ASIC's investigation found that the firm did not have a diversified portfolio and that it had invested most of its clients' funds in a single cryptocurrency, which resulted in significant losses for investors.

Mendham and Brown have been accused of being knowingly involved in the provision of financial services without an AFSL or an exemption. ASIC also alleges that they failed to take reasonable steps to ensure that NGS Crypto complied with financial services laws.

The civil penalty proceedings against NGS Crypto, Mendham, and Brown are ongoing, and it is unclear at this stage what penalties the regulator may seek to impose. However, ASIC has warned investors to be wary of investing in unlicensed firms offering cryptocurrency-related products and services. The regulator also reminded investors that investing in cryptocurrencies carries significant risks and that they should only invest money that they can afford to lose.

In response to ASIC's announcement, NGS Crypto issued a statement saying that it was cooperating fully with the regulator's investigation and that it was taking steps to address any regulatory compliance issues. The firm also said that it was working to ensure that it complied with all applicable laws and regulations going forward.

Mendham and Brown have not made any public statements regarding the allegations against them or NGS Crypto. However, their LinkedIn profiles still list their roles at the firm. It is unclear whether they have sought legal representation or plan to contest the allegations.

NGS Crypto's website is currently offline, and it is unclear whether the firm is still operating. The firm's LinkedIn page last posted an update in March 2023, announcing that it was "working closely with ASIC to address any regulatory compliance issues." The page also includes testimonials from several investors who claim to have made significant returns investing with NGS Crypto. However, it is unclear whether these testimonials are genuine or have been edited or fabricated.

ASIC's investigation into NGS Crypto is part of a broader crackdown on unlicensed firms offering cryptocurrency-related products and services in Australia. In recent years, ASIC has issued several warnings about the risks of investing in cryptocurrencies and has taken enforcement action against several firms for alleged breaches of financial services laws.

Investors who have invested with NGS Crypto or have concerns about their investments are encouraged to contact ASIC's Investor Protection Fund for assistance. The fund can provide compensation to investors who have lost money as a result of dealing with an unlicensed firm or a firm that has breached financial services laws.

In conclusion, NGS Crypto is an Australian digital asset investment firm that has been hit with civil penalty proceedings by ASIC for alleged breaches of financial services laws. The firm's senior executives, Brett Mendham and Ryan Brown, are also facing penalties for their involvement in the alleged breaches. ASIC accuses the firm of providing financial services without proper authorization, misrepresenting risks, and failing to