ASIC Initiates Legal Action Against Former Blockchain Global Director

Australia’s top financial regulator, the Australian Securities and Investments Commission (ASIC), has initiated civil penalty proceedings against Liang “Allan” Guo, a former director of Blockchain Global and a key figure at the now-defunct crypto platform ACX Exchange. The regulator alleges that Guo breached multiple director duties as the platform spiraled and finally collapsed in 2019, specifically pointing to the mishandling of customer assets and a failure to keep proper records.

ASIC’s case against Guo centers on his alleged breaches of fiduciary duty, including the mismanagement of pooled customer funds and providing inaccurate statements about their use. The regulator claims that Guo made false and misleading statements regarding his handling of customer funds and failed to comply with basic recordkeeping requirements as a company director. The ACX Exchange, operated by Blockchain Global from mid-2016, ceased operations after customers were unable to access their assets. A 2022 liquidator examination revealed that the exchange had pooled customer cash into a single fund, using it to purchase cryptocurrencies without segregating individual accounts.

ASIC’s investigation into Blockchain Global began in January 2024, following a report submitted by the company’s liquidators. The report estimated that as of October 2, 2023, Blockchain Global owed approximately A$58 million to unsecured creditors. Guo was restricted from leaving Australia in February 2024 as the regulator assessed whether criminal conduct had occurred, including alleged misuse of funds for personal expenses such as mortgage payments. However, Guo departed the country on September 23, 2024, shortly after the expiration of his travel restraint orders, and has not returned since.

ASIC’s current case against Guo emphasizes that such conduct, if proven, amounts to a serious violation of corporate governance principles. The regulator’s actions highlight the importance of proper recordkeeping and the segregation of customer funds in the crypto industry. The case against Guo serves as a reminder to industry participants of the need to adhere to regulatory requirements and maintain transparency in their operations. The outcome of this case could set a precedent for future regulatory actions against individuals and companies in the crypto space.