Civil Charges Against Blockchain Global's Ex-Director - Liang Guo
Let's Spill the Tea
Formrer Blockchain Global Executive Faces Lawsuit for Over $20 Million in Unsettled Customer Reimbursements by ASIC
In a whirlwind of allegations, Liang "Allan" Guo, former director of the defunct Australian cryptocurrency exchange ACX.io, is now facing court over claims he mismanaged and misused $20 million in customer funds.
The Australian Securities and Investments Commission (ASIC) has served proceedings against Guo, accusing him of financial wrongdoing and making false statements while serving as a director at Blockchain Global Ltd, the company behind the ACX exchange [1][2][3].
The ACX exchange was infamous for freezing customer withdrawals in late 2019, leaving many users out of pocket to the tune of over $22.7 million [1].
Guo's legal troubles mark the end of a long-running investigation into one of Australia's earliest and most damaging cryptocurrency exchange failures [1].
Cracks in the system were visible as early as 2017, when ASIC halted Blockchain Global's IPO bid and refused it a financial services license due to concerns over governance [2].
In January 2024, ASIC launched a formal investigation into ACX's collapse. Subsequently, an interim travel ban was imposed on Guo, which expired in August 2020, only for him to leave the country a month later, avoiding the justice system [2].
Financial Shenanigans Reminiscent of FTX
Liquidator Andrew Yeo, of Pitcher Partners, found that customer funds were co-mingled with company money and redirected to related entities. This financial maneuver mirrors the misuse of customer funds at FTX, where billions were allegedly diverted to Alameda Research without user consent [2].
Guo has claimed that wallet credentials for Blockchain Global's cryptocurrency holdings, worth millions of dollars, were lost when his laptop was stolen in China in 2019. However, this claim remains unsubstantiated, as no police report was ever filed to support it [1].
More Troubles for Blockchain Global
Co-directors Xue "Sam" Lee and Zijang "Ryan" Xu are also under investigation by ASIC [2]. In the same month as the probe began, Lee was charged by U.S. authorities for his role in a $1.89 billion Ponzi scheme under the HyperTech umbrella [2].
Under American scrutiny, Lee is accused of leading fake investment platforms with promises of gargantuan returns from cryptocurrency mining, all alleged to be a part of a colossal scheme [2].
Additionally, the U.S. Securities and Exchange Commission has filed a civil complaint against Lee and promoter Brenda "Bitcoin Beautee" Chunga for securities and wire fraud [2]. Chunga later pleaded guilty to her involvement in the scheme.
As these events unfold, regulators worldwide are reminded of the need for strict oversight in the cryptocurrency sector to prevent future financial catastrophes [1].
References:
[1] Sydney Morning Herald, December 2021, Report on Liang Guo's laptop theft claim not being substantiated by a police report[2] Coindesk, January 2024, Liang Guo's legal proceedings and Sam Lee's US criminal charges[3] Cointelegraph, Various dates, Overview of the ongoing legal status of Liang Guo and Sam Lee
But Wait, There's More! Daily Debrief Newsletter - Stay in the Know!
- The Australian Securities and Investments Commission (ASIC) has served proceedings against Liang Guo, accusing him of financial wrongdoing and making false statements while serving as a director at Blockchain Global Ltd, the company behind the ACX exchange.
- The mismanagement and misuse of $20 million in customer funds by Liang Guo is at the heart of the civil charges against him.
- The ACX exchange, infamous for freezing customer withdrawals in late 2019, was a subsidiary of Blockchain Global Ltd.
- Cracks in the system were visible as early as 2017, when ASIC halted Blockchain Global's IPO bid and refused it a financial services license due to concerns over governance.
- ASIC launched a formal investigation into ACX's collapse in January 2024, finding that customer funds were co-mingled with company money and redirected to related entities.
- The alleged financial maneuvers of Liang Guo mirror the misuse of customer funds at FTX, where billions were allegedly diverted to Alameda Research without user consent.
- Besides Liang Guo, co-directors Xue "Sam" Lee and Zijang "Ryan" Xu are also under investigation by ASIC, with Lee facing charges for his role in a $1.89 billion Ponzi scheme under the HyperTech umbrella in the U.S.
