ASIC, the Australian Securities and Investments Commission, has emerged victorious in a case against an unlicensed cryptocurrency platform that deceived its customers. The Australian Federal Court ruled in favor of ASIC, finding that BPS Financial, a crypto promoter based in Gold Coast, had violated the law by promoting an unlicensed crypto wallet. The company had misled customers by offering the ‘Qoin Wallet’, a non-cash payment facility that utilized a crypto-asset token called ‘Qoin’.
In light of the ruling, ASIC Chair Joe Longo emphasized the volatile and risky nature of crypto assets and stressed the importance of obtaining the necessary licenses and authorizations. Longo also highlighted ASIC’s ongoing efforts to take enforcement actions against unlicensed crypto businesses.
Justice Downes, presiding over the case, found that BPS Financial had breached the Corporations Act by operating without an Australian Financial Services license. The court also determined that the company had misled customers by providing false information about the Qoin Wallet.
The controversy surrounding the Qoin cryptocurrency began in early 2020 when it was introduced in Australia with promises of high returns for investors. However, concerns soon arose among business owners about the legitimacy of the digital currency and the possibility of misinformation. Many individuals and entities who had purchased Qoin believed that it complied with financial services laws, but ASIC alleged in 2022 that this was not the case. The regulator initiated civil penalty proceedings against BPS Financial, marking the first time it had taken court action against a crypto asset offering.
The court’s ruling in favor of ASIC serves as a significant milestone in regulating the crypto industry and sending a clear message about the importance of compliance and consumer protection.
