Australia’s crypto crackdown just turned very real.
The Federal Court of Australia has ordered NGS Group Limited, NGS Crypto Pty Ltd, and NGS Digital Pty Ltd to be wound up, bringing an abrupt end to a blockchain mining operation that ran for years without the proper licences.
At the heart of the case was a simple problem with big consequences. The Court found that the NGS entities were running a financial services business without holding an Australian Financial Services licence, a clear breach of the Corporations Act. That failure alone was enough to trigger serious action. But the damage went much deeper.
Over a six year period, more than 450 Australians poured roughly $59 million into NGS products, often using retirement savings through self managed superannuation funds. In many cases, investors were encouraged by NGS Crypto itself to set up those SMSFs, tying long term retirement money directly to high risk crypto mining schemes.
The Court ruled that NGS Group promoted and operated an unregistered managed investment scheme, describing the conduct as being in blatant contravention of the law. As a result, the companies have been permanently restrained from operating any financial services business, and liquidators have now been appointed.
Confidence, once lost, does not come back easily.
In its decision, the Court said investors were clearly harmed by NGS Group’s failure to hold the required licence and concluded there was a justifiable lack of confidence in the conduct and management of the company. That same lack of confidence extended to NGS Crypto.
Acting Chief Justice Collier noted that even after ASIC raised serious concerns, the controller of NGS Crypto failed to fix what the Court described as fatal flaws in the business. That inaction sealed the company’s fate.
Regulators had already stepped in earlier this year. In April 2024, the Federal Court appointed receivers from McGrathNicol over the digital assets of the NGS companies and several directors. ASIC pushed for those orders after warning that investor funds were at risk of being dissipated. The Court also imposed travel restrictions on director Brett Mendham, barring him from leaving Australia.
ASIC later argued that winding up the companies was the only realistic path to protect investors and recover remaining assets. The Court agreed, stating that liquidation gives scheme members the best chance of getting back at least part of their contributed funds.
For Australia’s crypto market, the message is clear. Innovation does not replace regulation. And when retirement savings are involved, courts and regulators are prepared to act fast and decisively.
