Australian Regulator Investigating Blockchain Global

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  • The Australian Securities and Investment Commission (ASIC) is investigating Blockchain Global after revelations of its directors’ involvement in failed crypto investment schemes
  • ASIC is now pursuing a criminal investigation after stories about HyperVerse surfaced last month
  • The scheme, linked to directors Lee and Xu, endured customer losses totaling $1.3 billion

Australia’s corporate watchdog, the Australian Securities and Investment Commission (ASIC), is launching a criminal investigation into the collapse of Blockchain Global, following revelations of its directors’ involvement in failed crypto investment schemes. The collapse of Blockchain Global in 2021 left creditors owed $58m and prompted liquidators to refer its directors – Allan Guo, Sam Lee, and Ryan Xu – to ASIC for potential breaches of the Corporations Act. Blockchain Global ran investment scams under many names, including HyperVerse and HyperFund.

ASIC Finally Takes Action

ASIC initially indicated no intention to take action after receiving the first report into Blockchain Global’s activities in March 2022, but a subsequent investigation by Guardian Australia into the HyperVerse crypto investment scheme, linked to Lee and Xu, prompted ASIC to reassess the situation. The liquidator’s final report, filed with ASIC in October, has now prompted ASIC to confirm it is assessing reports regarding Blockchain Global and the funds it operated.

The investigation comes amidst widespread losses from the HyperVerse investment scheme, which escaped regulator attention in Australia despite being flagged by authorities overseas as a possible scam and “suspected pyramid scheme.” The US Department of Justice disclosed in its own investigation that the three directors operated the fraudulent scheme for roughly two years ending in November 2022, promising investors that their investment would initially increase by up to 1% daily.

Liquidators Look Into HCash

The move by ASIC to examine the collapse of Blockchain Global comes at the same time as liquidators have revealed potential links in the company’s records to the operation of HCash, a cryptocurrency associated with the Hyper investment schemes. The liquidators discovered transactions totaling $500,000 in Blockchain Global’s main bank account linked to HCash, raising questions about fund usage.

HCash, Collinstar Capital, and the HCash Foundation were part of a group of companies behind the Hyper investment schemes, according to promotional materials. ASIC documents show HCash Tech Pty Ltd was owned by Xu and Jianbo “Jacob” Cheng and was established in 2017. An application for it to be deregistered was made in May 2023. Collinstar Capital, once owned by Xu, was later taken over by Cheng.

Despite allegations, Lee denies being behind HyperVerse, claiming limited involvement in technology provision and funds management.