ASIC Sues Former Blockchain World Exec Over $20M in Unpaid Buyer Claims – Decrypt

In short
ASIC has filed civil fees towards former Blockchain World director Liang Guo over alleged misuse of ACX buyer funds totaling over $20 million.
The regulator's investigation started in January 2024 after years of crimson flags, together with a 2017 IPO cease order and an October 2023 liquidator report detailing misappropriated property.
The agency’s co-director, Sam Lee, was charged within the U.S. the identical month for allegedly main a $1.89 billion Ponzi scheme tied to HyperFund and HyperVerse.
A former director of the collapsed Australian crypto change ACX.io is going through civil courtroom motion over what regulators allege are severe breaches tied to the disappearance of hundreds of thousands in buyer funds.On Wednesday, the Australian Securities and Investments Fee introduced proceedings towards Liang “Allan” Guo, accusing him of misusing consumer funds, failing to maintain correct monetary information, and making deceptive statements whereas serving as a director at Blockchain World Ltd. The corporate, now in liquidation, operated the ACX change, which froze withdrawals in late 2019 and in the end left over $20 million in claims from former prospects.The lawsuit is the fruits of a years-long investigation into one in every of Australia’s earliest and most damaging crypto change failures. Liquidators estimate that ACX customers are owed at the very least $22.7 million of the corporate’s whole debt of $58.6 million to unsecured collectors.The regulator had beforehand halted Blockchain World’s 2017 IPO bid and refused it a monetary providers license, citing governance issues.ASIC launched its formal investigation into the change’s collapse in January 2024. Weeks later, the Federal Court docket imposed interim journey restrictions on Guo. When these expired on August 20, he left the nation on September 23 and has not returned.Similar story, completely different exchangeIn an October 2023 report back to ASIC and collectors, liquidator Andrew Yeo of Pitcher Companions discovered that buyer funds had been co-mingled with firm cash and redirected into associated entities, as cited by ABC Information.That’s paying homage to former international change FTX’s misuse of buyer funds, the place billions had been allegedly diverted to its affiliated buying and selling agency, Alameda Analysis, with out consumer consent.Guo instructed liquidators that pockets credentials for Blockchain World’s crypto holdings, price a number of million {dollars}, had been misplaced when his laptop computer was stolen in China in 2019. As first reported in December 2021 by The Sydney Morning Herald, no police report was ever filed to substantiate the declare.Blockchain World’s different administrators, Xue “Sam” Lee and Zijang “Ryan” Xu, are additionally beneath investigation by ASIC. In the identical month the probe started, Lee was charged by U.S. authorities with allegedly operating a $1.89 billion Ponzi scheme beneath the HyperTech umbrella, which included HyperFund and HyperVerse.U.S. prosecutors unsealed legal wire fraud and securities fraud fees towards Lee, accusing him of selling bogus funding platforms with false guarantees of crypto mining returns. The SEC additionally filed a civil criticism the identical day towards Lee and promoter Brenda “Bitcoin Beautee” Chunga, who later pleaded responsible to conspiracy to commit securities and wire fraud.Edited by Sebastian SinclairDaily Debrief NewsletterStart on daily basis with the highest information tales proper now, plus authentic options, a podcast, movies and extra.