- The liquidator overseeing ACX.io’s insolvency has reported former and current directors to the Australian regulator
- ACX.io collapsed in 2021, resulting in over $50 million in creditor losses
- Liquidator Andrew Yeo found evidence of commingling and misappropriation of customer funds
The liquidator overseeing the insolvency of ACX.io, one of Australia’s pioneering cryptocurrency exchanges, has reported potential breaches of the Corporations Act to the Australian Securities and Investments Commission (ASIC) by one former director and two current directors. ACX.io filed for bankruptcy in 2021 having halted customer access two years before, with over $50 million owed to creditors. Liquidator Andrew Yeo has found evidence of commingling and misappropriation of funds, which he says warrants investigation.
ACX Blocked Customer Access in 2019
ACX.io, operated by Blockchain Global, launched in 2016 and grew to become one of Australia’s most popular crypto exchanges. However, in late 2019, customers lost access to their funds on the platform leading to Blockchain Global entering voluntary administration in October 2021. Liquidator Andrew Yeo was appointed to investigate the disappearance of customer funds and digital assets, as well as the affairs of Blockchain Global itself, and has discovered plenty of wrongdoing.
In his most recent report to creditors, Yeo highlighted the potential misappropriation of customer funds, suggesting that they were commingled with company funds and used for investments in other businesses and personal expenses, including mortgage payments without customer knowledge. As a result, he has formally recommended to ASIC that it investigate three individuals—directors Sam Lee, Zijing ‘Ryan’ Xu, and former director Liang ‘Allan’ Guo—for potential violations of the Corporations Act.
Wallets ‘Stolen’ After Laptop Theft
Evidence presented during public examinations last year revealed that customer funds were transferred among various bank accounts owned by affiliated trusts and companies, including custodian banking service providers. Funds were also moved into both online and offline digital wallets. Former director Allan Guo claimed to have lost access to specific wallets containing the company’s cryptocurrency, valued at $5 million, which was stored on a laptop that was stolen from an airport in China in December 2019.
Mr. Yeo’s investigation found that customer funds were loaned to a related business specializing in arbitrage trading, involving the use of a “trading bot.” Poor record-keeping practices were observed regarding the utilization of customers’ funds in this manner.
Additionally, the liquidator found that millions of dollars were invested in various ventures, including Canadian company Global Cannabis Applications Corp (GQAC) and Telegram Group, all without the knowledge of ACX customers.
