Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 3) [2024] FCA 822

Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 3) [2024] FCA 822

ASIC discharged its duty of candour and properly adduced relevant evidence at the ex parte hearing. The court had jurisdiction to make the orders sought because the respondents were carrying on business in Australia and the risk of dissipation was established. Cryptocurrency assets may be protected via freezing and...

Source-derived case information.

Parties
Applicant: Australian Securities and Investments Commission; First Respondent: NGS Crypto Pty Ltd ACN 624 825 065; Second Respondent: NGS Digital Pty Ltd ACN 624 825 065; Third Respondent: NGS Group Ltd (HK COMPANY NUMBER 19639490); Fourth Respondent: Brett Allan Mendham; Fifth Respondent: Mark James Ten Caten; Sixth Respondent: Ryan Todd Brown; Receiver: Receivers: Anthony Norman Connelly, Katherine Sozou and William James Harris of McGrath Nicol
Jurisdiction
Australia
Judgment Date
25 July 2024
Procedural Posture
Interlocutory Application (corporations/regulatory) / Post Ex Parte Interim Orders; Discharge/variation Application
Outcome
Application to rescind or discharge interlocutory orders refused; costs reserved; balance of interlocutory application to be heard
Legal Topics
Duty of Candour (ex Parte Applications), Freeze and Receivership Orders, Cryptocurrency as Property, Jurisdiction—carrying on Business in Australia, Asset Preservation, Financial Product Definition
Corporations Law Financial Services Law Regulatory Law Duty of Candour (ex Parte Applications) Freeze and Receivership Orders Cryptocurrency as Property Jurisdiction—carrying on Business in Australia Asset Preservation +1 more

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Parties

Australian Securities and Investments Commission

Applicant

NGS Crypto Pty Ltd ACN 624 825 065

First Respondent

NGS Digital Pty Ltd ACN 624 825 065

Second Respondent

NGS Group Ltd (HK COMPANY NUMBER 19639490)

Third Respondent

Brett Allan Mendham

Fourth Respondent

Mark James Ten Caten

Fifth Respondent

Ryan Todd Brown

Sixth Respondent

Receivers: Anthony Norman Connelly, Katherine Sozou and William James Harris of McGrath Nicol

Receiver

Procedural Posture

Interlocutory Application (corporations/regulatory) / Post Ex Parte Interim Orders; Discharge/variation Application

Legal Issues

  1. 1 Whether ASIC discharged duty of candour at ex parte application
  2. 2 Whether interlocutory orders appointing receivers and freezing assets should be rescinded or discharged
  3. 3 Whether court orders had a sound jurisdictional basis

Ratio Decidendi

ASIC discharged its duty of candour and properly adduced relevant evidence at the ex parte hearing. The court had jurisdiction to make the orders sought because the respondents were carrying on business in Australia and the risk of dissipation was established. Cryptocurrency assets may be protected via freezing and receivership orders under Australian law. The application to discharge or vary the interlocutory orders is refused.

Court Disposition

Application to rescind or discharge interlocutory orders refused; costs reserved; balance of interlocutory application to be heard

Orders

  • The interlocutory orders sought in paragraphs 1, 2, 3, 4, 5 and 6 of the interlocutory application filed on 27 May 2024 be refused.
  • Costs be reserved.