ASIC Sues Former Blockchain Global Exec Over $20M in Unpaid Customer Claims

Regulatory Crackdown: Former Director of Collapsed Australian Crypto Exchange Faces Civil Lawsuit

In a move to hold industry leaders accountable, the Australian Securities and Investments Commission (ASIC) has announced civil court proceedings against Liang "Allan" Guo, a former director of the now-defunct Australian crypto exchange ACX.io. The regulator alleges Guo was involved in serious breaches, including the misuse of customer funds and making misleading statements during his tenure at Blockchain Global Ltd., the company that operated the ACX exchange.

The collapse of ACX in late 2019 left over $20 million in claims from former customers, with liquidators estimating that ACX users are owed at least $22.7 million of the company's total debt of $58.6 million to unsecured creditors. The regulator had previously halted Blockchain Global's 2017 IPO bid and refused it a financial services license, citing governance concerns.

ASIC's investigation into the exchange's collapse, launched in January 2020, has now culminated in the civil court action against Guo. The regulator is seeking to hold the former director accountable for his alleged misdeeds, including the misuse of user funds and failure to maintain proper financial records.

The case is the latest in a series of regulatory crackdowns on the cryptocurrency industry, as authorities seek to protect investors and ensure the integrity of the rapidly evolving digital asset market. The collapse of ACX.io serves as a cautionary tale, underscoring the importance of robust governance and transparency in the crypto ecosystem.

Guo's Disappearance and ASIC's Ongoing Legal Battles

Guo, who left Australia in September 2020 and has not returned, is the primary target of ASIC's civil lawsuit. The regulator had previously imposed interim travel restrictions on Guo, but these expired in August 2020, allowing him to depart the country.

ASIC's legal battles in the crypto space extend beyond the ACX.io case. The regulator is also seeking special leave from the High Court to appeal a ruling in favor of crypto firm Block Earner, intensifying the dispute over the status of digital asset yield products under the Corporations Act.

The ACX.io collapse bears striking similarities to the FTX debacle, with allegations of customer funds being co-mingled with company money and redirected into related entities without user consent. Guo's claim that the wallet credentials for Blockchain Global's crypto holdings were lost when his laptop was stolen in China in 2019 has also come under scrutiny, as no police report was ever filed to substantiate the claim.

The ongoing legal proceedings and regulatory actions highlight the growing importance of transparency, governance, and investor protection in the rapidly evolving cryptocurrency industry. As the sector continues to mature, industry leaders and regulators must work together to ensure the integrity and stability of the digital asset ecosystem.