ASIC has disqualified Ashod Ohan Balanian, of North Ryde, New South Wales, from managing corporations for the maximum period of five years, for his involvement in three failed companies which operated a cryptocurrency fund.

Between May 2017 and May 2024, Mr Balanian was the director of:

• Digital Commodity Assets Pty Ltd ACN 619 068 781 (Digital Commodity);
• DCA Capital Pty Ltd ACN 629 833 129 (DCA Capital); and
• Polychain Pty Ltd ACN 663 522 049 (Polychain).

Digital Commodity and DCA Capital acted as trustee for a cryptocurrency fund called the Digital Commodity Assets Fund (DCA Fund). Information Memoranda for the DCA Fund stated that it was a wholesale investment fund that exploited price differences between exchanges for a certain cryptocurrency. Polychain became the investment manager for the DCA Fund on 12 November 2022.

ASIC found that Mr Balanian engaged in serious misconduct and failed to meet his obligations as a director when he:

• Failed to lodge a Report on Company Activities and Property with the Liquidators of Digital Commodity and DCA Capital when requested to do so;
• Failed to provide assistance and documents to the Liquidators of Digital Commodity and DCA Capital and showed an unwillingness to assist the Liquidators in understanding the affairs of Digital Commodity and DCA Capital;
• Failed to lodge a completed and signed Report on Company Activities and Property with the Liquidator of Polychain;
• Failed to ensure that Polychain kept adequate books and records;
• Failed to exercise due care and diligence to ensure that Digital Commodity and DCA Capital met their obligations to lodge income tax returns and business activity statements;
• Failed to exercise due care and diligence to ensure that Digital Commodity and DCA Capital complied with their obligations to register the DCA Fund as a managed investment scheme; and
• Failed to ensure that DCA Capital held an Australian financial services license (AFS licence) or be an authorised representative of an AFS licence holder.

ASIC found that Mr Balanian showed a willingness to ignore his obligations as a director of Digital Commodity, DCA Capital and Polychain. He allowed these companies to operate without complying with their obligations and ought to have known that a failure to comply with these obligations would put investors at risk.

ASIC considered that Mr Balanian was generally uncooperative and unhelpful in dealing with the Liquidators of Digital Commodity, DCA Capital and Polychain and that his conduct was particularly egregious as a director of companies that were acting as trustee and/or investment manager of a managed investment scheme.

In disqualifying Mr Balanian, ASIC relied upon supplementary reports lodged by Scott Langdon, Jennifer Nettleton and John Mouawad of KordaMentha, the liquidators of Digital Commodity and DCA Capital, and by Anthony Elkerton of DW Advisory, the liquidator of Polychain.

Mr Balanian is disqualified from managing corporations until 30 March 2031.

Mr Balanian has the right to seek a review of ASIC’s decision by the Administrative Review Tribunal.

An investigation by ASIC relating to the affairs of Digital Commodity, DCA Capital and Polychain continues.

Background

Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for a maximum period of five years if, within a seven year period, the person was an officer of two or more companies, and those companies were wound up and a liquidator provides a report to ASIC about each of the company’s inability to pay its debts. ASIC maintains a banned and disqualified persons register that provides information about people who have been disqualified from:

• Involvement in the management of a corporation;
• Auditing self-managed superannuation funds; or
• Practising in the financial services or credit industry.