Australian Federal Court Rules in Favor of ASIC, Against Unlicensed Qoin Crypto
In a significant ruling, the Australian Federal Court has sided with the Australian Securities and Investments Commission (ASIC) in a case involving an unlicensed cryptocurrency platform that deceived its customers.
The court found that BPS Financial, a crypto promoter based in the Gold Coast, had violated the law by promoting an unlicensed cryptocurrency wallet. The company misled customers by offering the ‘Qoin Wallet’, a non-cash payment system that utilized a cryptocurrency token called ‘Qoin’.
ASIC Chair Joe Longo highlighted the volatile and risky nature of crypto assets and stressed the importance of having the necessary licenses and authorizations. He emphasized the need for investors to receive accurate and transparent information.
Longo also pointed out that ASIC has been actively taking enforcement actions against unlicensed cryptocurrency businesses.
Justice Downes stated that BPS Financial had breached the Corporations Act by operating without an Australian Financial Services license. He also found that the company had misled customers by making false claims about the Qoin Wallet.
ASIC’s accusations against the controversial Qoin cryptocurrency date back to its launch in Australia in early 2020. The firm promised significant returns to investors and falsely portrayed the Qoin Wallet as officially registered.
Business owners soon expressed concerns about the future of the digital currency, citing possible misinformation and difficulties with cashing out.
In response, Australia’s corporate regulator launched legal proceedings, alleging that advertisements promoting Qoin had misled consumers by falsely implying that the cryptocurrency could be easily exchanged for other currencies and used by merchants.
Over 79,000 individuals and entities who invested in Qoin may have believed that the product complied with financial services laws. However, in 2022, ASIC revealed that this was not the case and filed civil penalty proceedings against BPS Financial.
Sarah Court, ASIC’s deputy chair, described the case as significant, as it was the first time they had taken legal action against a crypto asset offering. She emphasized that the Qoin facility was considered a financial product and should have been regulated accordingly.
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