The Australian Securities and Investments Commission (ASIC) has secured a travel ban in the Federal Court of Australia against former Blockchain Global director Liang (Allan) Guo following an ex parte application made in the Federal Court of Australia.
Mr Guo, along with Messrs Samuel Xue Lee and Zijang (Ryan) Xu ran the ACX Exchange, with Mr Guo being the only one remaining in Australia.
The ACX Exchange has been embroiled in legal woes since its collapse in December 2019, when the exchange stopped responding to user's withdrawal requests and stopped updating token prices.
Following its suspension from membership of the peak industry body Blockchain Australia, customers secured a freezing order against the assets of the exchange in September 2021. Mr Guo will now be temporarily banned from leaving Australia for a period of 6 months pursuant to an interim order handed down by the Court while ASIC pursue an investigation into possible breaches of directors' duties and fraud over the collapse of the exchange.
Under the Corporations Act, where ASIC is in the process of carrying out an investigation in relation to a person, it can apply to the Court to make orders:
requiring that person to deliver up to the Court a copy of his or her passport and such other documents the Court thinks fit; and
prohibiting that person from leaving this jurisdiction without consent of the court.
While the Court acknowledges there is no information suggesting an intent by Mr Guo to leave Australia, the nature of ASIC's investigation and the potential for criminal prosecution nonetheless constitutes a flight risk, in the Court's eyes.
The critical point the Court must consider when exercising this power is whether the restraint of a person is necessary or desirable for the purpose of protecting the interests of aggrieved persons. In this instance, the Court found that Mr Guo's right to travel internationally may be outweighed by the public interest in ASIC being able to pursue its investigation.
The Court eventually made the interim orders on the basis that ASIC's investigation is in its early stages and ASIC has not had the opportunity to speak with Mr Guo. Further, Mr Guo is considered by ASIC a "central player" in its investigation and it will be necessary for ASIC to interview and examine Mr Guo, seeing as he is the only person of interest who remains in Australia.
In 2021 the AFR reported that there was a "mexican stand off" over a hard-drive containing 176 Bitcoins (worth AUD$17.6M on current prices but only AUD$8M then with a lawsuit between Mr Chen and Mr Gao. There is no word if ASIC is seeking those Bitcoins.
Mr Guo has not yet had the opportunity to respond to ASIC's application or the allegations raised in the claim, and the matter is next due before the court on 12 March 2024.
By Steven Pettigrove and Luke Misthos and Michael Bacina
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