The Federal Court of Australia has ruled against BPS Financial for operating “Qoin Wallet” without proper licenses. The Australian Securities and Investments Commission (ASIC) underscores the importance of regulatory compliance to protect consumers in the volatile crypto market.
Australian Court Rules Against BPS Financial for Unlicensed Crypto Operations
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‘First Court Outcome’ Against Crypto Payment Facility
The Federal Court of Australia has found that BPS Financial Pty Ltd. “engaged in unlicensed conduct when offering the ‘Qoin Wallet,’ a non-cash payment facility which used a crypto-asset token called ‘Qoin,'” the Australian Securities and Investments Commission (ASIC) announced Friday.
Justice Kylie Downes found BPS guilty of violating the Corporations Act from January 2020 by not holding or being authorized under an Australian Financial Services Licence to issue or provide financial advice about the Qoin Wallet.
ASIC Chair Joe Longo explained that this decision “was a significant ruling as the first court outcome against a non-cash payment facility involving crypto.” He detailed: “ASIC has taken a number of enforcement actions against crypto asset businesses with the intention of clarifying what is a regulated product and when the provider needs a licence.” Longo added:
Crypto assets are highly volatile, inherently risky, and complex. This makes it critically important that providers have the appropriate licences and authorisations, and that investors are provided with clear and accurate information.
The court also concluded that BPS engaged in deceptive practices by falsely promoting the Qoin Wallet as registered and its usage as growing among merchants. Furthermore, the court ruled that the company misled consumers about the liquidity of Qoin tokens, claiming that they could be easily converted into other cryptocurrencies or Australian dollars.
“The Court found the only digital currency exchange that accepted Qoin prior to November 2021 was BTX Exchange, which was not independent of BPS and did not permit crypto assets to be exchanged with each other,” ASIC conveyed.
“These proceedings should send a message to the crypto industry that their products will continue to be scrutinised by ASIC to ensure consumers are protected and that they comply with regulatory obligations. Entities should not be making claims about features, or the regulatory status of their offerings, that are false or misleading,” Longo warned.
What do you think about the Australian court’s ruling regarding the Qoin Wallet? Let us know in the comments section below.
