The Australian Securities and Investments Commission (ASIC) has been investigating NGS Crypto, a Gold Coast cryptocurrency mining company, for allegedly misleading people into investing their retirement funds in volatile digital assets. Previously, the firm faced legal action for attempting to present itself as part of a superannuation fund.
The Australian Financial Review also revealed that NGS Crypto was advertising for sales executives to have “discussions with our members” about cash investments, superannuation and home refinancing. The company’s online videos promote “many reasons why Australians are turning to NGS to help them to implement a powerful financial plan B”, with a “for education purposes” mark.
ASIC conducted a raid on NGS Crypto’s offices and decided to freeze the firm’s assets amid concerns that $62 million from 450 investors might “vanish”. The regulator alleges that NGS companies targeted Australians to shift money from regulated super funds into blockchain mining packages promising fixed-rate returns.
In 2022, NGS Super took court action against NGS Crypto for misleading consumers by associating itself with the super fund. The superannuation fund accused NGS Crypto of infringing its copyright and breaking the Australian Consumer Law by promoting Facebook ads saying that these two firms are interconnected.
The proceedings were dismissed by consent after NGS Crypto promised to rebrand by removing NGS “or word that is substantially identical with or deceptively similar” by July 1, 2024. NGS Super said it would “cease making representations to the effect that [NGS Crypto] have at any time on or before 5 December 2023 ‘targeted’ NGS Super’s members on Facebook or any other social media platform”.
As recently as April, NGS Crypto was looking for sales executives on the Gold Coast on base pay of $60,000 per year with potential to earn $250,000 in bonuses.
“NGS Crypto is also looking for professionals who may have an investment background as discussions with our members include: cash investment, superannuation, home refinancing.”
The role asked for past experience “as a closer, and consistently exceeding sales targets”, and jobseekers must have “advanced influence and sales skills”.
Insolvency and advisory firm McGrathNicol has been appointed as the receiver manager for the digital assets of NGS Crypto, NGS Digital, and NGS Group, all based in Hong Kong. Brett Mendham, Ryan Brown, and Mark Ten Caten serve as the sole directors of these respective companies.
ASIC secured orders preventing Mr. Mendham from leaving Australia, while Mr. Ten Caten is believed to be residing in Bali.
Mr. Mendham and Mr. Ten Caten (or Tencaten), were previously directors and shareholders of World Binary Exchange, which was liquidated by ASIC in 2018, and Australian Global Markets, which underwent voluntary liquidation in 2013. Mr. Brown, however, was not involved in either of these companies, according to ASIC records.
Australian Global Markets provided subscription services to clients, offering trade recommendations for index-based binary options across various share market indices.
A 2015 liquidator report revealed that Australian Global Markets went into liquidation with debts exceeding $500,000, primarily attributed to debts related to the company’s directors, including director drawings and intercompany loans.
Upon receiving a demand for these debts, letters were sent from lawyers representing Mr. Ten Caten and Mr. Mendham, stating their intention to declare bankruptcy if pursued.