The Australian Securities and Investments Commission (ASIC) has initiated civil proceedings against Liang ‘Allan’ Guo, former director of Blockchain Global, connected to the now-defunct ACX Exchange. The crypto platform, which ceased operations in December 2019, left its customers facing losses exceeding AU$20 million. ASIC alleges that Guo’s actions significantly contributed to the financial hardships endured by ACX’s customers by failing to manage their funds responsibly and maintain proper records.
The liquidators appointed to oversee ACX’s collapse have estimated that the exchange’s total debts surpass AU$58 million, with AU$22.7 million directly owed to its customers. ASIC’s legal case against Guo will be heard in the Federal Court of Australia.
ASIC’s scrutiny of Guo stems from serious concerns about his management of customer funds and the accuracy of financial statements made about these dealings. The regulator’s investigation came on the heels of an investigative report published by The Guardian in 2023, which linked Blockchain Global to various known financial scams.
Initially, ASIC had turned down a request to investigate Blockchain Global in 2022, following a referral from liquidators handling the company’s affairs. However, a report detailing the company’s connections to the Hyperverse crypto scam prompted a reassessment of the situation. The Hyperverse scheme reportedly defrauded investors of over US$1.3 billion (approximately AU$2 billion).
Two directors of Blockchain Global, Sam Lee and Ryan Xu, have been implicated in these fraudulent activities. Despite denying any wrongdoing, evidence—including their participation in a Hyperverse launch event featuring a fake CEO—has raised significant suspicion. The so-called CEO was revealed to be an actor with no real involvement in the project. Furthermore, Hyperverse is linked to a network of other dubious crypto initiatives, including HCash and Collinstar Capital.
In a statement to The Guardian, Sam Lee refuted any claims of engagement in scams, suggesting that unfounded accusations are being circulated online.
As the legal proceedings unfold, they highlight substantial market risks associated with unregulated cryptocurrency platforms. With ASIC enhancing its efforts to ensure accountability in the cryptocurrency sector, the outcome of this case may set significant precedents for the treatment of financial mismanagement in digital asset trading.
Overall, the escalating scrutiny from regulatory bodies like ASIC reflects an urgent need for greater oversight in the cryptocurrency industry to protect investors and uphold market integrity.
