The search is on for $50m in lost cryptocurrency after two Australian exchanges collapse

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A cryptocurrency exchange is digital marketplace that enables customers to buy, sell and hold cryptocurrencies. It makes money through set fees or by taking a percentage of transactions. No mainstream banks in Australia allow customers to buy and sell cryptocurrencies, although the Commonwealth bank has a pilot in the works, so exchanges are currently the only means to do this.

To get to the bottom of what has happened to the cash and coins held in the accounts of ACX customers, Yeo will need to cut through a jungle of claims and counter-claims that have been playing out in court since last year.

Last week, the smaller exchange Mycryptowallet also fell into administration, reportedly owing clients hundreds of thousands of dollars.

In a speech on Thursday to the Australia-Israel Chamber of Commerce, the treasurer, Josh Frydenberg, said the government would consult on establishing a licensing system for digital currency exchanges, together with regulation of businesses that hold custody of crypto on behalf of customers.

The consultation process is due to be finished by the middle of next year, after an election that must be held by 21 May 2022.

Experts say licensing exchanges is a good idea, but it needs to be backed up by enforcement.

She points to failures such as the financial planning scandals that rocked the banking industry in the mid-2010s, and the 2009 Trio Capital failure, which deprived retirement savers of $176m and was the biggest superannuation collapse in Australian history, as examples of where licensing regimes have failed to safeguard consumers.

In a lawsuit filed in the Victorian supreme court, 94 of them claim Blockchain Global, as operator of the exchange, owes them $13m worth of tokens including bitcoin, ethereum and ripple, as well as cash held in their ACX accounts.

Guo and Lee did not respond to questions from Guardian Australia and they are yet to file defences in the matter.

Meanwhile, in another dispute also before the Victorian supreme court, Blockchain Global and Guo are fighting a former company employee, Jin Chen, over control of 117 bitcoins. Chen claims that he is owed the crypto for work developing software to run the ACX exchange, but the company and Guo say Chen has failed to comply with a deal that was supposed to end the stoush, because he did not make the source code of the software accessible. Chen denies this.

The issues are less clear at the smaller Mycryptowallet, which is in the hands of liquidator Terry van der Velde of SV Partners.

Hanrahan says the collapses make government regulation of exchanges an urgent need.