ASIC Charges Former Blockchain Global Director Over Duty Breaches Linked to ACX Exchange

The Australian Securities and Investments Commission (ASIC) has launched a lawsuit against a former director of Blockchain Global, alleging multiple breaches of directors’ duties.

The regulator initiated civil penalty proceedings against Liang Allan Guo over his alleged involvement in the collapse of ACX Exchange.

Blockchain Global’s crypto exchange platform ACX allowed investors to buy and sell digital currencies. However, in late 2019, customers lost access to their funds on the exchange, leading to its collapse.

Per the company’s liquidator’s estimates, Blockchain Global owes more than A$20 million ($12.8 million) in unsecured creditor claims to ACX customers.

Blockchain Global Head Breached Directors’ Duties

Per ASIC’s allegations relate to Guo’s dealings with the ACX Exchange customer funds. Further, the regulator pointed out statements made about those dealings and obligations to keep proper books and records.

Liquidator Andrew Yeo from Pitcher Partners was appointed to investigate where the customers’ funds and digital assets went.

The ASIC started an investigation in January 2024. The probe came after liquidators submitted a detailed report outlining Guo’s potential breaches of the Corporations Act, the release read.

The report noted that as of October 2023, Blockchain Global had A$58 million ($37.3 million), owing to unsecured creditors.

Guo was then barred from leaving the country in February 2024. However, he left Australia in September after his travel restraint orders expired and hasn’t returned, the regulator said.

Customer Funds Loaned to Related Business

According to a previous local media report, liquidator Yeo said that customer funds were also being loaned to a related business, which specialised in arbitrage trading.

The liquidator’s report found that the firm failed to properly maintain records of customer funds. Additionally, Guo had transferred more than $1.7 million from an account holding customer funds to invest in publicly listed shares. This was put in the name of Guo’s family trust for the benefit of Blockchain Global, Yeo added.

“What we have been able to ascertain, however, is that those funds were mixed with other company funds and used for a series of other purposes,” the liquidator said at the time. Further, in October 2023, the lawyer acting for investors involved in the civil claim against Blockchain Global, drew comparisons between the collapse of Blockchain Global to the demise of Sam Bankman-Fried’s crypto exchange FTX