ASIC Sues Former Blockchain Global Director Over ACX Exchange Collapse

The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against Allan Guo, the former director of Blockchain Global, alleging that he mishandled customer funds from the ACX exchange. The lawsuit, filed in the Federal Court, centers on multiple breaches of directors' duties during Guo's tenure, including the mishandling of client funds and making false statements regarding their handling.

The legal action follows the collapse of the ACX exchange in December 2019, which left customers unable to withdraw funds and raised significant concerns about the oversight and management of cryptocurrency exchanges. ASIC's allegations against Guo relate to his dealings with ACX Exchange customer funds, statements made about those dealings, and obligations to keep proper books and records.

Investigations have been ongoing since Blockchain Global collapsed in 2019. Liquidators found in proceedings that occurred from 2022 that the company owed around $59 million to its creditors and close to $22.8 million of that money belonged to creditors from the ACX Exchange. Guo reportedly left Australia in September 2024, after a travel restraint against him expired in August. The travel restraint was put in place in February last year when ASIC said it was investigating Guo and two other directors from Blockchain Global, Samuel Xue Lee and Zijang (Ryan) Xu regarding their involvement in the collapse of the ACX Exchange.

The lawsuit against Guo is part of a broader effort by ASIC to hold individuals accountable for their actions in the cryptocurrency space. The regulator has been actively pursuing cases against those who have breached their duties, sending a clear message that misconduct will not be tolerated. This case serves as a reminder to all directors and executives in the industry that they have a responsibility to act in the best interests of their customers and to comply with all relevant laws and regulations.

The outcome of this case could have significant implications for the cryptocurrency industry, as it sets a precedent for how regulators will handle cases of misconduct in the future. It also underscores the need for stronger oversight and regulation in the industry, as well as the importance of transparency and accountability in the management of customer funds. As the cryptocurrency industry continues to evolve, it is essential that all stakeholders work together to ensure that it operates in a fair and transparent manner, protecting the interests of investors and maintaining the integrity of the financial system.