Aussie Retiree’s left in Financial Ruin as Crypto Company Loses Funds

Cryptocurrency is still a relatively high risk asset but it isn’t short of people rushing in to invest in the stories of instant financial wins. But the majority of stories end in financial ruin rather than financial freedom.

A company in Australia promised crypto powered retirement income but it has collapsed into one of the country’s most serious digital asset failures, with investors now facing massive losses. What was marketed as a safe, fixed return blockchain mining opportunity, has been wound up by the Federal Court after operating for years without a licence. Of the estimated $59 to 60 million invested, liquidators have so far recovered just $6.7 million.

At the centre of the case is the NGS Group, including NGS Group Limited, NGS Crypto Pty Ltd and NGS Digital Pty Ltd, which targeted Australian investors for more than six years. The companies encouraged people, many approaching or already in retirement. To funnel their savings into crypto mining packages often via self-managed superannuation funds (SMSFs).

Retired Aussies Suffer The Loss Of Unlicensed Operators

According to the Federal Court, the NGS entities were operating a financial services business without holding an Australian Financial Services (AFS) licence. They found it to be a fundamental breach of the Corporations Act. More seriously, the court found the group was running an unregistered managed investment scheme “in blatant contravention” of Australian law.

Over 450 Australians invested approximately $59 million with many persuaded to move their retirement savings outside the traditional superannuation system. The scheme promised fixed annual returns of up to 16%, alongside assurances that investor capital would be returned. These claims that ultimately proved to be false.

ASIC Deputy Chair Sarah Court said the companies showed a “complete disregard” for financial services laws, leaving investors exposed to significant losses and stripping them of critical consumer protections.

“The licensing regime exists to ensure people receive proper information about what they’re investing in, from qualified advisers acting in their best interests,” Court said. “That simply didn’t happen here.”

Australian Federal Court Steps In

ASIC’s intervention escalated in April 2024, when the Federal Court appointed receivers over the digital assets of the NGS companies and their directors. This came as concerns were raised that funds were at risk of being dissipated. The court also restrained director Brett Mendham from leaving Australia, while freezing orders were applied to stop assets being moved.

By December 2025, the Federal Court ordered the companies and the unregistered investment scheme to be wound up, permanently restraining them from operating any financial services business. Justice Berna Collier said the breaches posed a serious and ongoing risk to investors and that there was a “wholly justifiable lack of confidence” in the management of the companies.

In relation to NGS Crypto specifically, the court noted that even after becoming aware of ASIC’s concerns, the company’s controller failed to fix what were described as “fatal flaws” in its operations.

Only $6.7 Million Recovered So Far

Liquidators from McGrathNicol, who were appointed by the court, have now reported grim early results. Of the nearly $60 million invested, they have identified approximately AU$6.7 to 6.9 million in cryptocurrency.

Tracing the remaining funds is proving difficult. McGrathNicol told the court that recovery efforts are complicated due to the extreme crypto price volatility, which can rapidly change asset values. Long term staking arrangements, with some assets potentially locked until 2037. Poor record keeping, making it hard to determine which crypto belongs to which investor.

These challenges mean investors may face years of uncertainty, with no guarantee that additional funds will be recovered and could hold future potential losses

A Clear Warning to All

This case stands as one of Australia’s clearest warnings about the dangers of mixing crypto investments with retirement savings, particularly when schemes operate outside licensed frameworks.

While blockchain mining and other crypto related products are not illegal, ASIC has reiterated that they can fall under financial services laws. Any company offering such products to Australians must comply with licensing, disclosure and consumer protection requirements.

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