Australia Takes Legal Action Against Ex-Director of Blockchain Global for Alleged Duty Breaches in Crypto Exchange Collapse

In a significant development for the cryptocurrency industry, Australia's corporate regulator, the Australian Securities and Investments Commission (ASIC), has launched civil penalty proceedings against Liang (Allan) Guo, a former director of the now-defunct cryptocurrency exchange firm Blockchain Global. The legal action, initiated in the federal court, centers on allegations of multiple breaches of directors' duties during Guo's tenure at the company.

Blockchain Global operated the ACX Exchange, a cryptocurrency trading platform that collapsed around December 2019, leaving customers unable to withdraw their funds or digital assets. According to ASIC, the issues stem from Guo's handling of customer funds, misleading statements regarding those dealings, and a failure to maintain proper financial records, which are critical obligations for company directors under Australian law.

The collapse of ACX Exchange has had a profound impact on investors, many of whom lost significant sums. Reports from the firm's liquidators, as cited by ASIC, indicate that Blockchain Global owes approximately A$58 million ($37.3 million) to unsecured creditors as of October 2023. This staggering debt underscores the scale of the financial fallout from the exchange's failure.

ASIC's investigation into Blockchain Global began in January 2024, prompted by a detailed report from the liquidators highlighting potential misconduct. The regulator's decision to pursue legal action against Guo reflects a broader push to enforce accountability in the rapidly evolving and often unregulated cryptocurrency sector, where investors are particularly vulnerable to mismanagement and fraud.

This case is a stark reminder of the risks associated with cryptocurrency investments and the importance of robust oversight. ASIC's actions signal a commitment to protecting consumers and ensuring that company directors adhere to their legal responsibilities, particularly in high-risk industries like digital assets.

As the legal proceedings unfold, the outcome of this case could set a precedent for how regulatory bodies address misconduct in the crypto space. It may also prompt further scrutiny of other failed exchanges and their leadership, potentially reshaping the landscape of cryptocurrency regulation in Australia and beyond.