- The Australian Federal Court has ruled in favor of the Australian Securities and Investments Commission (ASIC) against an unlicensed crypto platform, BPS Financial, which allegedly misled customers with its Qoin Wallet.
- The Qoin Wallet, a non-cash payment facility using a crypto-asset token called ‘Qoin’, was falsely represented by BPS Financial, leading to a breach of the Corporations Act.
- ASIC Chair Joe Longo emphasized the importance of crypto platforms having appropriate licenses and authorizations, and providing clear and accurate information to investors.
The Australian Federal Court’s ruling against BPS Financial’s unlicensed Qoin Wallet highlights the importance of regulatory compliance in the crypto industry.
Unlicensed Qoin Wallet Misleads Customers
BPS Financial, a Gold Coast crypto promoter, allegedly broke the law by promoting the unlicensed Qoin Wallet. The firm misled customers by falsely representing the Qoin Wallet as a licensed non-cash payment facility using a crypto-asset token called ‘Qoin’. This breach of the Corporations Act led to the Australian Federal Court ruling in favor of ASIC.
ASIC’s Stance on Crypto Regulation
ASIC Chair Joe Longo emphasized the importance of crypto platforms having appropriate licenses and authorizations. He cautioned against the highly volatile and risky behavior of crypto assets, and stressed that ASIC has been consistently taking enforcement actions against unlicensed crypto businesses. This case underscores ASIC’s commitment to ensuring regulatory compliance in the crypto industry.
Qoin’s Controversial Launch and ASIC’s Accusations
Qoin was launched in Australia in early 2020, with promises of multi-fold returns for investors. However, concerns were soon raised about possible misinformation and the inability of some to cash out. ASIC launched court action alleging that advertisements promoting Qoin misled consumers by giving them the false impression that they could confidently exchange Qoin for other currencies and that there were merchants who accepted it. Over 79,000 individuals and entities who bought Qoin may have been misled into believing that the product was compliant with financial services laws.
Conclusion
The Australian Federal Court’s ruling against BPS Financial’s unlicensed Qoin Wallet serves as a reminder of the importance of regulatory compliance in the crypto industry. Crypto platforms must have appropriate licenses and authorizations, and provide clear and accurate information to investors. This case also highlights the risks associated with investing in crypto assets, and the role of regulatory bodies like ASIC in protecting investors.
