A Wollongong dog breeder was awarded a $205,000 federal grant for an aquaculture project for which he tried to raise more than $5m on the blockchain market by issuing “aqua tokens” that offered a return to investors based on the price of fish.

The taxpayer-funded grant was made under the government’s regional jobs and investment packages scheme (RJIP), which was the subject of a damning auditor general report and has seen a slew of projects receive funding against the recommendations of the department.

Valery Kovalevskiy, who is the managing director of All T&A Consulting, which received the grant, runs a dog breeding business in the Shoalhaven area selling central Asian shepherd dogs. Google and business searches indicate no connection to the aquaculture sector in Australia, and he is not listed in New South Wales’s aquaculture industry directory.

The aquaculture project is located in the federal seat of Gilmore, which was the Coalition’s most marginal electorate in NSW and was lost to the Labor party at the May election.

Kovalevskiy told Guardian Australia that the $410,000 co-funded iAqua project to establish a Murray cod aquaculture business in Yatte Yattah on the NSW south coast had stalled.

While documents show that building works were meant to be completed in January 2019, Kovalevskiy said he was yet to obtain a construction certificate. He said he hoped the project would be fully operational by June next year.

However, he refused to comment on a cryptocurrency document that solicited more than $5m from investors to establish the project as a “large scale, sustainable freshwater aquaculture facility”.

The “initial coin offering”, uncovered in cached internet documents, says aqua token holders who bought into the aquaculture scheme could expect a return on investment of up to 52%, with the token price valued according to the sale price of 100 grams of Murray cod, fixed to the price per kilogram.

Aqua tokens are a type of cryptocurrency – like Bitcoin – that use an internet-based smart contract system through the Ethereum blockchain platform.

The government grant to All T&A Consulting Pty Ltd is highlighted in the investor document which offered almost four million aqua tokens at a price of $1.40 each.

According to an online cryptocurrency tracker, the project has been cancelled. Another blockchain site marketing the investment describes iAqua as “an entrepreneurial startup project which requires heavy funding to realize its goals; hence the crowdsale (sic)”.

When asked about the iAqua coin offering, Kovalevskiy told Guardian Australia: “I can’t discuss that I am afraid.

“I can’t explain anything about that.”

The document lists various other members of the iAqua team, including co-founder Svetlana Kovalevskaya, who is an accountant and director of All A&T consulting and who has previously worked at the Russian ministry of health.

The company’s listed legal counsel, Alex Hoffman, works for Telstra in Melbourne as a general manager. According to Hoffman’s LinkedIn profile, he worked as a “part-time legal adviser” for iAqua for four months in 2018. He claims to have written the prospectus for iAqua’s ICO.

The company’s “fish biology and aquaculture biosecurity consultant”, Inna Kuznetsova, is a researcher at the Chinese University of Hong Kong.

According to the corporate regulator the Australian Securities and Investment Commission, initial coin offerings are “highly speculative investments” that are mostly unregulated.

Guardian Australia revealed on Wednesday that another project in the marginal seat of Gilmore received $750,000 while possibly trading insolvent, and went bust six months later.

In another instance, a grant in north Queensland awarded under the scheme was provided to a bus and ferry project which is losing money and is unlikely to happen for two more years.



The auditor general also revealed that two projects that were granted co-funding exemption were given the reprieve in breach of the program’s guidelines, while big political donors have also benefited from the scheme.

On Wednesday, the Senate passed two motions ordering the government to produce documents relating to the $220.5m RJIP scheme, including all written briefings provided to the ministerial panel which allocated the grants.

The government has so far refused to release this information, meaning it has been impossible to know which projects the ministerial panels decided to approve against the advice of the department.

According to the auditor general, the ministerial panel declined to fund 28% of grant applications recommended to them by the department, and approved 17% of applications that had not been recommended.

The government has a deadline of 3.30pm on Thursday to comply with the document order.

In response to a series of questions about the aquaculture project, a spokeswoman for the infrastructure minister, Michael McCormack, said the RJIP program provided funding for projects that “benefit communities by growing regional economies and providing sustainable employment”.

She said applications were assessed against the criteria outlined in the Regional Jobs and Investment Packages program guidelines.