NGS Crypto Rebrands Amid ASIC Investigation and Alleged $41 Million Investor Debt
Summary:
ASIC is investigating Australian cryptocurrency firm NGS Crypto, now renamed Hiddup, over a legal probe and lawsuit related to AUS$61 million ($41 million) in investor interest. The company directors and assets were frozen in April. ASIC alleges that NGS targeted Australians to form self-managed superannuation funds and converted these into digital assets, violating domestic laws by operating without an Australian financial services license. Amidst these proceedings, ASIC is aiming for an injunction to cease NGS operations without the required license. As a result of these investigations, an advisory firm has been appointed as receivers and the search for the missing $41 million continues.
The Australian cryptocurrency firm NGS Crypto has rebranded to "Hiddup" as it faces a legal probe and lawsuit by the Australian Securities and Investments Commission (ASIC). The company stated on June 25 that the renaming was a result of a trademark disagreement, amidst simultaneous ASIC proceedings concerning an alleged AUS$61 million ($41 million) due in interest to investors. The firm's directors, Mark Ten Caten, Brett Mendham, and Ryan Brown, along with the company's assets were subjected to a freeze in April. Hiddup was not immediately available for comments when reached out by Cointelegraph.
ASIC's accusations against three connected crypto mining companies, NGS Crypto Pty Ltd, NGS Digital Pty Ltd, and NGS Group Ltd, emerged as these companies filed for liquidation. These businesses are alleged to have targeted Australians to form self-managed superannuation funds and shifted these funds into digital assets for investment in fixed return blockchain mining packages. The preliminary examination by ASIC suggested the NGS companies gathered investments of about $41 million from over 450 Australian individuals. According to the ASIC, these companies contravened domestic laws by offering financial services without an Australian financial services license. As part of the proceedings, the ASIC is aiming for temporary and permanent injunctions stopping NGS from operating without the necessary license.
In light of these issues, the Federal Court has appointed advisory firm McGrathNicol as receivers to assist creditors in recouping funds. Besides, Mendham's passport has been confiscated and efforts to locate the absent $41 million are ongoing.
In 2022, the superannuation fund NGS Super filed a legal case against NGS Crypto, charging NGS Crypto with copyright infringement and legal contraventions for falsely presenting an affiliation with the NGS Super funds to attract investors. The Australian reports that ASIC is cognizant of NGS's rebranding attempts during the investigation, and an ASIC representative confirmed their ongoing investigation into the matter.
Despite the legal action, the company continues to advertise 6-16% annual returns from blockchain mining on its website. NGS Super has stressed that it doesn't deal in cryptocurrency or associated offerings. NGS Crypto cited the active trademark dispute as the cause for its rebranding as Hiddup and stated on its website that the name change was to avoid confusion and establish a distinction for the business.
Published At
6/25/2024 2:16:44 PM
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