The Australian Securities & Investment Commission (ASIC) has emerged victorious in a legal battle against BPS Financial. The company has been accused of engaging in deceptive practices through its non-cash payment system, which relies on the Qoin token.
The Federal Court of Australia has determined that BPS Financial made four false claims. Specifically, the firm asserted that Qoin was registered or approved by the government, complied with legal regulations, could be freely exchanged for other cryptocurrencies or fiat currencies, and was accepted by an expanding network of merchants.
The court has ruled that BPS Financial violated both the Corporations Act and the Australian Securities and Investments Commission Act. It has ordered both parties to engage in discussions regarding the next steps, with another hearing scheduled for later this year, during which penalties may be imposed.
BPS Financial launched the Qoin system in January 2020. According to the company’s website, the Qoin ecosystem consists of the Qoin token, blockchain technology, a digital wallet, and a payment system. The website further states that there are over 100,000 users and 36,000 registered merchants within the Qoin network. As of the end of June 2021, there were 394 million Qoin tokens in circulation.
Source: ASIC Media
In November 2021, a class action lawsuit was filed against BPS Financial, accusing the company of deception, noncompliance with regulations, and operating as a pyramid scheme. The status of this case remains ongoing. Furthermore, in February 2021, Qoin was expelled from the Blockchain Australia industry association.
ASIC initiated legal action against BPS Financial in October 2022. In its official statement, ASIC highlighted that this court decision marks the first ruling against a non-cash payment system involving cryptocurrency. ASIC Chair Joe Longo expressed his satisfaction with the outcome.
In December 2022, ASIC filed a lawsuit against Finder.com, a financial product comparison website, for offering an unlicensed cryptocurrency yield-bearing product. In March, the court ruled against ASIC, and the organization is currently appealing this decision.
In another case brought by ASIC against crypto lender Block Earner, the court concluded that managed cryptocurrency products that provide a yield require a license. However, products that simply act as intermediaries for decentralized finance (DeFi) may not necessitate a license.
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