Australian Regulator Sues Former Blockchain Global Director

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), has launched legal action against Liang “Allan” Guo, the former director of the now-defunct cryptocurrency exchange, Blockchain Global. The civil proceedings allege multiple breaches of Guo’s directorial duties.

ASIC’s press release, issued May 28th, details allegations of misconduct surrounding the handling of ACX Exchange customer funds. Specifically, Guo is accused of making false and misleading statements about these dealings and failing to maintain adequate financial records. These actions allegedly contributed to the exchange’s collapse in December 2019, leaving customers unable to access their assets.

The Sydney Morning Herald previously reported on findings from 2022 liquidator examinations, which revealed that Blockchain Global commingled customer funds with company funds to purchase cryptocurrencies and for business loans. This practice directly violates standard fiduciary responsibilities.

ASIC states that Blockchain Global owes over $12.8 million AUD ($14.6 million USD in updated figures from November 2023) to unsecured creditors, a significant portion stemming from former ACX Exchange customers. The company’s total unsecured debt is reported at $37.7 million USD.

Guo’s Departure and Ongoing Investigation

ASIC’s investigation, launched in January 2024 following liquidators’ reports, was hampered by Guo’s departure from Australia in September 2024, after travel restraint orders expired. The regulator is seeking his return to face the charges.

The case highlights the ongoing challenges in regulating the cryptocurrency sector and underscores the importance of robust oversight in protecting investors. The ASIC’s pursuit of this legal action demonstrates its commitment to holding individuals accountable for misconduct in the financial markets.

Related: Australia outlines crypto regulation plan, promises action on debanking

Further Reading: Former Blockchain Global Director Restricted From Leaving Australia

This situation emphasizes the growing need for clear and comprehensive regulations in the crypto space to safeguard investors and maintain market integrity. The ongoing legal battles serve as a reminder of the risks associated with investing in unregulated digital assets and the importance of due diligence.