Australia’s ASIC to Inspect Blockchain Global Over Involvement in Series of Failed Crypto Schemes

Bankrupt crypto company Blockchain Global has more troubles for itself now as it has come under the scrutiny of Australia’s ASIC. The Australian Securities and Investments Commission (ASIC) will now investigate the firm’s involvement in a series of failed crypto schemes.

Blockchain Global’s directors to be investigated by ASIC

An investigation by The Guardian Australia revealed two of Blockchain Global’s directors were allegedly involved in a series of failed crypto investment schemes. Australia’s corporate regulator will now look into the specifics of the defunct bitcoin company to investigate further the allegations.

The directors were identified as Allan Guo, Sam Lee, and Ryan Xu. Allegedly they were referred by Blockchain’s liquidator to ASIC due to possible Corporations Act violations.

The alleged violations on Blockchain’s directors included improbable betrayals of confidence, violations of the director’s obligations, and irrational director-related transactions.

However, ASIC had previously rejected the plea by Blockchain’s liquidators stating that they did not intend to act upon it.

Blockchain Global involvement in HyperVerse scam

ASIC now has started looking into the previously filed liquidator’s report. This comes following a Guardian Australia investigation into the HyperVerse cryptocurrency investment scam, which is connected to Lee and Xu.

The HyperTech group company HyperVerse lured investors with the prospect of substantial profits. Their projected rate of return on investment quickly looked questionable.

This news also comes after a Guardian Australia investigation revealed that the purported chief executive of the allegedly fraudulent HyperVerse scheme, Steven Reece Lewis, might not be real.

According to US-based crypto analysis company Chainalysis, the HyperVerse scam resulted in a loss of $1.3 billion in 2022.

ASIC’s decision to look into the Blockchain Global collapse coincides with the liquidator’s disclosure of a potential connection between the company’s records and the running of HCash. HCash was a cryptocurrency connected to the Hyper investment scams.

According to reports, 2 debt transactions totaling $500,000 have been found by the liquidators in Blockchain Global’s primary bank account. These bank accounts have been traced to find a correlation to HCash.

Although, it’s still unclear if the money in the bank accounts was utilized for any malpractices.

The fall of Blockchain Global and rise in crypto-related frauds

Blockchain Global was an Australian blockchain startup that failed after owing creditors $58 million. The company went into voluntary liquidation back in November of 2021, shocking the entire crypto realm of Australia.

Previously crypto promoter Rodney Burton was placed under arrest in the US. Burton was also linked to the HyperVerse scam making it the first time that charges were brought against anyone connected to the fraud. Rodney was also accused of operating an unlicensed money transmission business.

Despite international regulators designating the HyperVerse crypto scheme as potentially fraudulent, the ASIC had also come under fire for failing to issue a warning against it.

As previously reported by CoinGape, after a run of losses in October 2023, the year-to-date (YTD) total for cryptocurrency scams, hacks, and exploits in 2023 has increased to an amazing $1.35 billion.  This substantial amount highlights the ongoing lack of security and vulnerability in the crypto sector.