The Australian Securities & Investment Commission (ASIC) has emerged victorious in a court case against BPS Financial, a firm accused of engaging in deceptive practices involving its non-cash payment facility, which is backed by the Qoin token. The Federal Court of Australia determined that BPS had made four false claims relating to Qoin. Specifically, the firm had asserted that Qoin was registered or approved by the government, complied with all legal requirements, could be easily exchanged for other cryptocurrencies or fiat currency, and was accepted by a growing network of merchants.
The court concluded that BPS had violated the Corporations Act and the Australian Securities and Investments Commission Act. As a result, the court ordered both parties to engage in discussions about the next steps before reconvening later this year for a hearing that could result in penalties for BPS. Qoin was launched by BPS in January 2020 and comprises a token, blockchain, wallet, and a payment facility, according to the firm’s website. The platform reportedly boasts over 100,000 users, 36,000 registered merchants, and 394 million Qoin tokens in circulation as of June 2021.
In November 2021, a class action lawsuit was filed against BPS, alleging deceit, noncompliance with regulations, and operating as a pyramid scheme. This case is still ongoing. Qoin was expelled from the Blockchain Australia industry association in February 2021. ASIC, the regulatory body, began legal proceedings against BPS in October 2022. In a statement, ASIC stated that this court victory marked the first ruling against a non-cash payment facility involving cryptocurrency.
Joe Longo, the Chair of ASIC, expressed the agency’s dedication to taking enforcement actions against crypto companies in order to provide clarity on which products are subject to regulations and when a license is required. In a separate lawsuit, ASIC sued Finder.com, a financial product comparison website, in December 2022 for offering an unlicensed cryptocurrency yield-bearing product. ASIC suffered a defeat in March when the court ruled against the regulatory body’s claims. ASIC is currently appealing this decision. In another case involving crypto lender Block Earner, the court ruled that managed crypto products that yield returns require a license, but products that act as intermediaries for decentralized finance do not necessarily fall under the same regulatory framework.
Finder.com should also be held accountable for their unlicensed product.
ASIC’s commitment to protecting consumers from deceptive practices and ensuring compliance is commendable. Thank you for your efforts, ASIC!
I hope the ongoing class action lawsuit brings justice to the victims!
I’m so glad ASIC is holding companies accountable for their actions. This will help build trust and confidence in the crypto market.