- Australian court has found BPS Financial guilty of operating unlicensed crypto operations with the Qoin Wallet.
- BPS has been accused of misleading marketing and selling over $40 million in Qoin Tokens without proper authorization.
- ASIC chair Joe Longo emphasizes the importance of crypto providers holding appropriate licenses.
The Australian Federal Court has found BPS Financial guilty of operating unlicensed crypto operations with the Qoin Wallet, marking a significant development in the regulation of cryptocurrency in Australia.
BPS Found Guilty of Unlicensed Crypto Operations
The Australian Federal Court has ruled that BPS Financial was operating without a license, granting victory to the Australian Securities and Investments Commission (ASIC). BPS Financial was charged for promoting QOIN tokens outside established laws. This ruling comes as a significant blow to BPS, which had marketed Qoin tokens as a payment method for goods and services to both individual consumers and business proprietors, referred to as ‘Qoin Merchants.’
Qoin Wallet Constitutes a Financial Product
Justice Downes, in his ruling, determined that the Qoin Wallet constituted a financial product, specifically, a non-cash payment facility. As such, BPS was found to be in violation of the Corporations Act by not holding an Australian Financial Services License. This ruling has far-reaching implications for other crypto providers, emphasizing the need for appropriate licenses and authorizations.
Misleading Marketing and Breaches of Law
BPS was also found guilty of misleading customers by falsely promoting Qoin as a widely accepted medium of exchange. In reality, virtually no merchants accepted the token. The only exchange facilitating Qoin redemption was BTX Exchange, which had close ties to BPS. While BPS did not execute a direct rug pull, the court found that its actions constituted breaches of several critical laws.
Conclusion
This case serves as a stark reminder of the risky and complex nature of crypto assets. ASIC chair Joe Longo emphasized the importance of this case, stating that it underscores the critical need for crypto providers to hold appropriate licenses and authorizations. This landmark ruling is likely to have significant implications for the crypto community in Australia and potentially influence regulatory approaches in other jurisdictions.
