Crypto king Allan Guo loses his court bid for passport as ASIC investigates

Blockchain Global founder Liang ‘Allan’ Guo has had his request for the return of his passport rejected by a court as he faces a potential criminal prosecution.

Blockchain Global founder Allan Guo and his solicitor, George Tsogas, outside the Federal Court.

Crypto king Liang “Allan” Guo’s bid to get his passport back has been refused as he faces “very serious” allegations and potential criminal prosecution relating to the collapse of an Australian cryptocurrency exchange that owes investors $59m.

Mr Guo asked Federal Court judge David O’Callaghan to reverse orders that restricted him from travelling overseas until August.

There were concerns he may flee the country before the corporate watchdog can question him over the failure of ACX Exchange, operated by Blockchain Global, which crumbled in December 2019 when investors could not withdraw their money.

But in a judgment published March 18, Justice O’Callaghan refused his bid, citing evidence liquidators’ identified potential claims against Mr Guo in the range of $12.2m and $42.9m.

“Given the nature of the allegations made by ASIC … it seems to me that it can fairly be assumed that an examination of Mr Guo might well improve the chances of aggrieved persons recovering monies – those persons being the investors whose money seems to have been misappropriated,” he said.

“In my view, the continued presence of Mr Guo in Australia is necessary or desirable for that reason and also because the ASIC investigation is in its early stages and ASIC has not yet had the opportunity to speak with Mr Guo.

“And because he is a central player and the only relevant person left in Australia who may be able to assist with the investigation, it will be necessary for ASIC to interview or examine him.”

Mr Guo released a statement through his solicitor when contacted for comment by The Australian.

“I respect the Court’s decision and will, as always, adhere to my legal obligations in cooperating with ASIC,” he said.

Mr Guo, who is the only director of the company to remain in the country after Samuel Xue Lee and Zijang “Ryan” Xu fled shortly after ACX collapsed, allegedly spent part of $2.6m investor funds on his personal home loan and transferred $1.8m worth of Bitcoins belonging to Blockchain Global into a cryptocurrency wallet that he controlled.

Blockchain Global appointed voluntary administrators in October 2021, and in February 2022 liquidators were appointed.

To support his legal case for expelling the restrictions made against him, Mr Guo argued he was not a flight risk because he has a seven-year-old son who resides in Melbourne and who he shares parenting responsibilities for with his ex-wife.

He said he should be permitted to travel to China from “time to time” to care for his unwell father, according to the judgment.

“The defendant has strong ties to Australia. He commenced living in Australia in March 2002,” the judgment says.

“He has permanent residency status in Australia, which he obtained in 2008. He currently resides in Melbourne with his mother. He considers Australia his home, intends to live here the rest of his life and has lost any connection with China, where he has not lived since he was 16 years old.”

A liquidator’s report identified claims against Mr Guo based on grounds he breached his director’s duties, made unreasonable director-related transactions and being a “knowing assistant” in a breach of fiduciary duty among others.

Quantified, those claims against Mr Guo amount to between $12m and $42m, according to the liquidator’s report.

Mr Guo is also being sued over the collapse of ACX Exchange in two other cases in the Victorian Supreme Court.

ASIC successfully argued travel restrictions should continue for Mr Guo because if he left the country for an extended period or permanently, it would “significantly hamper the ASIC investigation into him and Blockchain Global”.