Australian Regulator Takes Former Blockchain Global Director to Court for Alleged Misconduct
Australia’s financial markets regulator, the Australian Securities and Investments Commission (ASIC), has initiated legal proceedings against Liang "Allan" Guo, the former director of the now-defunct Blockchain Global. This action stems from allegations of multiple breaches of directors’ duties concerning the management of customer funds at the ACX Exchange, which was operated by Blockchain Global.
Allegations of Misconduct
According to ASIC’s May 28 press release, Guo faces serious allegations regarding his handling of ACX Exchange’s customer funds. The regulator claims that Guo not only made misleading statements about these dealings but also failed to maintain accurate records, thus violating his responsibilities as a director. ASIC’s investigation revealed that during the operational period of the ACX Exchange from mid-2016 until its collapse in December 2019, there were significant irregularities concerning the management of customer assets.
The ACX Exchange ceased operations after customers were unable to withdraw their investments. As the exchange liquidated, it was disclosed that customer funds had been mismanaged, with cash deposits pooled with cryptocurrency purchases, raising further concerns regarding Guo’s conduct during this period.
In a report by liquidators in 2022, it was determined that Blockchain Global owed over 20 million Australian dollars ($12.8 million) in unsecured claims to former ACX customers. More recently, in November 2023, liquidators provided an updated assessment indicating that the total debts of Blockchain Global had ballooned to approximately 58.6 million Australian dollars ($37.7 million), of which 22.7 million Australian dollars ($14.6 million) were owing to customers of the crypto exchange.
Investigation and Legal Proceedings
ASIC commenced its investigation into Blockchain Global in January 2024, prompted by the revelations made by the liquidators regarding the company’s finances. During this investigation, Guo was subject to travel restrictions intended to prevent him from leaving Australia while inquiries into potential criminal offenses were conducted. There were allegations that he had transferred funds from the collapsed exchange to pay personal debts, including his mortgage.
However, following the expiration of these travel restrictions in September 2024, Guo departed from Australia and has not returned since. ASIC is currently pursuing the matter in court, seeking accountability for Guo’s alleged mismanagement of the exchange and the resulting financial impact on its customers.
Wider Regulatory Context
This case forms part of a broader narrative regarding the regulatory environment surrounding cryptocurrency exchanges in Australia. As interest in digital assets continues to grow, the Australian government has been stepping up its commitment to establish clear regulatory frameworks to protect investors and ensure accountability within the crypto space.
In parallel to ASIC’s legal actions against Guo, the regulator is also seeking permission from the High Court to appeal a separate ruling in favor of fintech firm Block Earner, regarding claims that its fixed-yield earning service does not qualify as a financial product.
As both the legal proceedings against Guo and the appeal against Block Earner unfold, stakeholders in the Australian cryptocurrency landscape are closely watching how these decisions may influence future regulations and the operational standards expected of cryptocurrency platforms.
For ongoing news and updates on cryptocurrencies and related regulatory developments, keep following our coverage.
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