Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has initiated civil proceedings against Liang “Allan” Guo.
He was the former director of Blockchain Global, in connection with the dramatic collapse of the ACX cryptocurrency exchange.
In a press release dated May 28, ASIC announced that Guo is facing court allegations related to “multiple breaches of directors’ duties”.
The breaches include mishandling customer funds, providing false and misleading statements, and failing to maintain proper financial records.
Blockchain Global, the operator of ACX Exchange from mid-2016 to December 2019, went into liquidation after customers were unable to withdraw their funds, sparking investigations into its internal financial practices.
Allegations Include Misuse of Funds and Financial Misconduct
ASIC’s allegations focus on Guo’s involvement in the misuse of customer funds entrusted to the ACX Exchange.
During a court examination conducted by the liquidators in 2022, it was revealed that customer deposits were pooled together and used to purchase cryptocurrency.
On the contrary, they were meant to be individually safeguarded or properly accounted for.
The commingling of funds, coupled with the absence of detailed record-keeping, raised significant concerns about corporate governance within Blockchain Global.
ASIC has accused Guo of making deceptive public statements regarding these financial dealings, painting a misleading picture of the exchange’s financial health prior to its collapse.
Company Owed Millions, Guo Leaves Country After Travel Ban Expires
The liquidation process uncovered significant liabilities. In a report filed in November 2023, Blockchain Global was found to owe approximately A $58.6 million (US$37.7 million).
The money was owed to unsecured creditors, including A$22.7 million (US$14.6 million) directly attributable to former ACX Exchange customers.
ASIC noted that it began its formal investigation into Blockchain Global in January 2024 following the liquidators’ report.
Guo, who was initially barred from leaving the country during the investigation, departed Australia in September 2024 after the travel restraint orders expired and has not returned since.
ASIC did not confirm his current whereabouts, raising further concerns about holding him accountable for his alleged actions.
ASIC Pursues Broader Legal Strategy Amid Crypto Regulation Push
The legal action against Guo forms part of a broader regulatory crackdown on misconduct within the cryptocurrency sector in Australia.
Concurrently, ASIC is seeking permission from the High Court to appeal a lower court’s ruling that favored Block Earner.
Block Earner is a fintech company whose fixed-yield crypto product was deemed not to be a financial product under current laws.
The separate case underscores ASIC’s intention to tighten regulatory oversight of digital asset services and address ambiguities in financial product classification.
As public scrutiny grows over collapsed crypto platforms and investor losses, ASIC’s actions signal a shift toward stricter enforcement and the need for robust regulation in the rapidly evolving digital finance space.
Also Read: ASIC Charges Ex-Crypto Exchange CEO Over BTC Fraud Amid Nation’s Strict Regulations