Collapsed Australian Crypto Exchange ACX Allegedly Used Customer Funds To Run Business
An Australian court has heard that Blockchain Capital – which operated the ACX crypto exchange that collapsed last year – used customer deposits to fund another part of its business instead of keeping the money on reserve, according to a Sydney Morning Herald report.
- The company's former chief technology officer – who left the company in 2018 and is not accused of any wrongdoing – told liquidators he was instructed by Blockchain Global's co-founder to transfer bitcoin from customer accounts to other parts of the business. "I understood it was for a collateral purpose," he testified.
- In other signs of poor controls. the exchange allegedly mingled customer funds into a single pool. "There’s no way of identifying that this bitcoin was owned by Customer A and this bitcoin is owned by Customer B," the CTO was asked. "Yes," he replied.
- The revelations were made to the Supreme Court of Victoria on Wednesday during the public liquidator’s examinations into the group.
- Blockchain Global, the company behind the exchange, collapsed in October owing creditors $50 million. This included hundreds of Australian account holders who were unable to get their money after the group blocked withdrawals. Investigations into the disappearance of millions of dollars deposited by customers are ongoing.