Australian securities regulators are investigating Blockchain Global after a report connected two of its directors to previous crypto schemes.
The Australian Securities and Investment Commission (ASIC) is investigating Blockchain Global directors Sam Lee and Ryan Xu after a newspaper investigation linked the two to another crypto scheme called Hyperverse, according to a report.
Asic began investigating the pair in connection with possible violations of Australia’s Corporations Act in 2021 following the fall of Blockchain Global. After the initial investigation, Asic chose not to take any action.
Now, after a Guardian Australia story linked the directors to Hyperverse, ASIC is looking into Blockchain Global’s liquidation report.
Says an ASIC spokesperson,
“ASIC confirms that it is assessing reports from the liquidator in relation to [Blockchain Global].”
A report from The Guardian Australia has uncovered significant losses in the HyperVerse investment scheme. Despite being flagged as a possible scam and suspected pyramid scheme overseas, the scheme managed to evade regulatory scrutiny in Australia.
The US Internal Revenue Service (IRS) has claimed that early investors were paid with funds from later investors, and the company’s claimed Bitcoin (BTC) mining operations did not actually exist. The estimated losses for HyperVerse in 2022 are around $1.3 billion. Furthermore, an investigation by ASIC into the collapse of Blockchain Global has revealed a potential link to HCash, a cryptocurrency associated with the Hyper investment schemes.
According to the report,
“Rewards that were accumulated through the earlier Hyper schemes were converted to HCash before they could be converted to other cryptocurrencies.”
While Ryan Xu’s whereabouts are currently unknown, Lee has not responded to the report.
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