Coinspeaker
Australian Court Backs ASIC in Legal Case against Qoin Scheme
In a significant legal decision, a court in Australia has predominantly sided with the country’s market regulator, the Australian Securities and Investments Commission (ASIC), concerning BPS Financial Pty Ltd (BPS) and its Qoin scheme.
The Judge Justice Downes ruling, which has far-reaching implications for the financial sector, underscores the importance of regulatory oversight in safeguarding investors and maintaining the integrity of financial markets. The battle began in October 2022 when ASIC accused BPS of making misleading and deceptive conduct relating to its entire Qoin project, its token, blockchain, and wallet offerings.
ASIC to Ensure BPS Comply with Regulatory Standards
The Qoin scheme, marketed as a digital currency or cryptocurrency, drew the attention of authorities due to concerns over its legitimacy and compliance with financial regulations. The security watchdog also claimed that BPS violated the country’s Corporation Act as it was not registered under the Australian Financial Services License. It also claimed that it was not authorized by a license holder to provide such services to customers.
ASIC argued that BPS Financial Pty Ltd engaged in misleading conduct by promoting Qoin as a legitimate digital currency while failing to disclose critical information to consumers. The court’s ruling largely supports ASIC’s position, highlighting the necessity for transparency and honesty in financial product offerings.
Meanwhile, as part of this case, the court disagreed with ASIC’s allegation that the Qoin Blockchain and the Qoin Wallets constituted one scheme. Although ASIC has argued otherwise, it should be noted that the Qoin Blockchain and the means of obtaining Qoin and registering as a Qoin merchant are not integral parts of the mechanism that enables users to make non-cash payments.
The order instructed the Australian regulator and BPS to reach an agreement on a resolution to resolve any remaining issues, including penalties to be imposed later in the month.
Australian Watchdog Crypto Crackdown
While the United States Securities and Exchange Commission (SEC) is known for its dogged crypto enforcement action, ASIC is not lagging behind.
The Australian regulator opened investigations and charges against a few crypto entities last year. In February 2023, it began investigating Binance for wrongful closure of derivatives accounts based on false classification. A few months later, the regulator revoked the license granted to Binance through Oztures Trading Pty Ltd, a local subsidiary. Notably, a press release from the ASIC specified that Binance requested the revocation.
As reported by Coinspeaker in July 2023, the commission canceled FTX Australia’s license since the parent body declared bankruptcy in November 2022. It was alleged that the Australian arm did not get approval directly from ASIC but through several takeovers.
However, ASIC’s legal victory underscores its ongoing efforts to combat illegal crypto activities in Australia, safeguard investor interests, and ensure the integrity of financial markets.next
Australian Court Backs ASIC in Legal Case against Qoin Scheme