ASIC Detains Ex-Blockchain Global Director in ACX Exchange Collapse Probe
On May 15, 2024, the Federal Court of Australia imposed interim travel restraints on Ryan Xu, former director of the now-liquidated Blockchain Global Limited. Xu faces an ongoing investigation by the Australian Securities and Investments Commission (ASIC) into the dramatic collapse of cryptocurrency trading platform ACX Exchange in December 2019. The orders prevent Xu from leaving Australia until at least November 2025, ensuring his availability as ASIC builds its case.
Background: Blockchain Global and the ACX Exchange
Originally founded in 2014 as Bitcoin Group, the company rebranded to Blockchain Global in 2016 and launched ACX Exchange, allowing retail customers to buy, sell and store cryptocurrencies. At the end of 2019, ACX Exchange abruptly suspended trading and withdrawals, locking users out of their funds. Liquidators appointed in early 2022 uncovered more than AUD 58 million in unsecured creditor claims, including balances owed to former ACX customers.
ASIC’s Enforcement Actions
In January 2024, ASIC opened a formal probe into whether Blockchain Global’s directors, notably Ryan Xu and co-director Allan Guo, breached their duties under the Corporations Act and mishandled customer assets. Key developments include:
• Interim travel restraint on Ryan Xu until November 2025.
• Civil penalty proceedings against Allan Guo for alleged improper handling of client funds and failure to maintain accurate records.
• Ongoing case management hearings through 2025 as ASIC gathers evidence of potential director misconduct and fraudulent conduct.
Impact on Australia’s Crypto Industry
The ACX Exchange collapse and ASIC’s robust response underscore growing regulatory scrutiny over digital asset platforms in Australia. The case highlights:
• Risks of investing through under-regulated exchanges.
• The need for strong governance and transparent custodial arrangements.
• Regulators’ readiness to pursue legal action against executives who fail to protect customer assets.
Key Takeaways for Investors
• Conduct thorough due diligence: Verify an exchange’s regulatory standing, governance structure and asset-safeguarding measures before trading.
• Expect heightened enforcement: ASIC’s active investigations and court filings signal stricter oversight of crypto firms.
• Demand transparency and accountability: Reliable record-keeping and clear reporting channels are essential for market integrity.
Looking Ahead
The outcomes of ASIC’s probe into Blockchain Global’s former directors may reshape Australia’s regulatory landscape for cryptocurrency exchanges. Potential reforms could include stricter licensing requirements, enhanced custody rules and sharper director-duty provisions. Meanwhile, retail investors and industry participants should stay informed of regulatory updates and support measures that reinforce consumer protection in the fast-evolving digital asset sector.
