ASIC files civil proceedings against ex-Blockchain Global director in fallout from ACX collapse

The Australian Securities and Investments Commission has filed civil proceedings against former Blockchain Global director Liang “Allan” Guo over alleged breaches of directors’ duties linked to the collapse of ACX Exchange.

According to a May 28 press release from the regulator, ASIC alleges that Guo was involved in the mismanagement of customer funds and failed to maintain proper records during his time at Blockchain Global, the now-liquidated operator of ACX Exchange. The civil penalty proceedings have been brought in the Federal Court.

ASIC claims Guo made false and misleading statements about the handling of ACX customer assets and breached his duties as a director by failing to ensure the company maintained adequate financial documentation.

ACX allegedly misused the funds, which ultimately led to the platform’s collapse in late 2019, when users were unable to withdraw their assets.

Blockchain Global operated the ACX Exchange from 2016 to 2019, until its collapse. In February of 2022, the company was placed into liquidation, and subsequent court proceedings revealed that customer deposits were used to purchase crypto assets and were commingled into a single pooled fund, rather than being kept in segregated accounts.

ASIC launched its investigation into Blockchain Global in January 2024, after court-appointed liquidators submitted a detailed report in November 2023 estimating that the company owed over 58 million Australian dollars to unsecured creditors, including more than 22 million Australian dollars claimed by former ACX customers.

Guo was subject to interim travel restraint orders starting February 2024 but departed Australia in September after the orders expired. 

ASIC confirmed he has not returned since. The regulator is also considering potential criminal charges in relation to Guo’s alleged conduct, including the use of company funds for personal expenses such as mortgage payments.

ASIC’s pursuit of Guo aligns with a broader regulatory trend in Australia toward more comprehensive oversight of digital asset platforms. 

In March, Australia’s Treasury department proposed fresh licensing requirements for digital asset platforms that hold customer funds, pushing them under the umbrella of traditional financial services law.

Under the proposal, exchanges, custodians, and stablecoin issuers are expected to face new obligations, ranging from redemption safeguards to transparency rules on token listings.

Meanwhile, in April, AUSTRAC, the country’s financial intelligence agency, warned that inactive crypto exchanges still listed on its register risk being deregistered, citing concerns that they could be exploited by criminals for money laundering and fraud.