The Australian Securities and Investments Commission (ASIC) has filed charges against Liang (Allan) Guo, a former director of failed cryptocurrency firm Blockchain Global Limited.
The corporate regulator claims Guo failed in his duties as director, and consequently the ACX Exchange went under, leaving many customers without the ability to get their money.
Blockchain Global offered a platform via its ACX Exchange that enabled users to purchase, sell, and hold a range of cryptocurrencies.
But the platform dramatically closed down in December 2019 with up to AUD $20 million owed to unsecured creditors — its former customers. Liquidators entrusted with the company’s liquidation would later claim that Blockchain Global owed an astounding AUD $58.6 million to unsecured creditors.
ASIC’s inquiry, which began in January 2024, came after the liquidators sent a substantial report to the regulator that raised concerns that former and current company officers had breached the Corporations Act, including Guo.
The regulator’s allegations against Guo concern the manner in which customer funds held at the ACX Exchange have been treated by him, the statements made by him concerning these funds and his lack of books and records.
There was a dramatic twist to the case after Guo was prevented from leaving Australia as the ASIC considered criminal charges. Those travel restrictions orders lapsed by September 2024 and Guo fled from the country and has not come back.
Liquidators had earlier said customer funds were believed to be mixed with other company funds and have been used for things other than the exchange’s operations, including investments in publicly listed shares through guo’s family trust.
The winding up of Blockchain Global and subsequent legal action demonstrates the ongoing regulatory issues facing the fast-paced cryptocurrency industry. This is a big reminder about the need for strong governance and the responsibilities of directors in running cryptocurrency exchanges and holding customer funds.
ASIC going after Guo is not only an indication that its gunning for people who have been running companies that allegedly did not meet their duty of care in the digital asset space. Investors and industry players, meanwhile, will be monitoring the case carefully, considering it could establish precedents for other regulatory follow-up on the crypto market.