ASIC has commenced civil penalty proceedings in the Federal Court against BPS Financial Pty Ltd (BPS) for allegedly making false, misleading or deceptive representations and engaging in unlicensed conduct in relation to a non-cash payment facility involving a crypto-asset token called Qoin (the Qoin Facility).
ASIC alleges that in marketing the Qoin Facility, BPS made false, misleading or deceptive representations, including that:
- consumers who have purchased Qoin tokens can be confident that they will be able to exchange them for other crypto-assets or fiat currency (such as Australian dollars) through independent exchanges,
- Qoin tokens can be used to purchase goods and services from an increasing number of merchants registered with BPS,
- the Qoin Facility and/or the Qoin wallet application used to transact Qoin tokens are regulated, registered and/or approved in Australia, and
- the Qoin Facility and/or BPS are compliant with financial services laws.
ASIC Deputy Chair Sarah Court said, ‘We allege that, despite what BPS represented in its marketing, Qoin merchant numbers have been declining, and that there have been periods of time where it was not possible to exchange Qoin tokens through independent exchanges. ASIC is particularly concerned about the alleged misrepresentation that the Qoin Facility is regulated in Australia, as we believe the more than 79,000 individuals and entities who have been issued with the Qoin Facility may have believed that it was compliant with financial services laws, when ASIC considers it was not.’
‘Where it falls within our remit, ASIC will take targeted action against unlicensed conduct and misleading promotion of crypto-asset financial products that could harm consumers – this is a key priority for ASIC. Crypto-assets are highly volatile, inherently risky, and complex. Every crypto-asset is different, often making it difficult to compare with each other – or anything else. This makes it crucially important that investors are provided with honest and accurate information.’
ASIC is seeking declarations, pecuniary penalties, injunctions and adverse publicity orders from the Court.
The date for the first case management hearing is yet to be scheduled by the Court.
