Australia’s corporate watchdog has taken legal action against Liang “Allan” Guo. He served as a director at Blockchain Global. The company once ran the ACX Exchange, a cryptocurrency platform that later collapsed.
The Australian Securities and Investments Commission (ASIC) filed civil charges against Guo. They say he violated the requirements of a company director. ASIC says he mismanaged customers’ money and did not maintain appropriate records for the company.
The ACX Exchange opened for business in mid-2016. It enables customers to store and trade cryptocurrency. In December 2019, customers began experiencing issues. Some couldn’t access their assets or make withdrawals. This marked the beginning of the demise of ACX.
Blockchain Global’s $59M collapse
Blockchain Global entered into voluntary administration in February 2022. Liquidators investigated the firm’s history. They discovered red flags. Their report in November 2023 indicated the firm had almost $59 million in unpaid debts to unsecured creditors. More than $22 million of this was from former customers of ACX.
ASIC initiated a statutory investigation in January 2024. The issue was whether Guo and others had contravened corporate legislation. Regulators checked over company documents, financial transactions, and public statements. They had grounds for pursuing civil charges.
Guo departed the country in September 2024. He did this following the lapse of his travel ban. He is yet to return. His absence creates an element of uncertainty in the case. The court will now proceed against him in his absence until he returns.
The federal court reviews ACX’s allegations
ASIC seeks to hold him to account. They would like the court to impose sanctions. Those can be fines or bans from running businesses. ASIC also wishes to emphasize the directors’ obligations in financial businesses.
The ACX case is a reminder. The crypto exchanges face tough laws. There must be honest directors and accurate records. Anything short of the latter can result in disastrous consequences. ASIC‘s action is a reminder of the same.
The allegations against Guo will be examined by the Federal Court. The judgment will be given in due course. The ruling can have implications for the future handling of crypto-related misconduct in Australia.
