Australia’s Financial Regulator Sues BPS Over “Misleading” Representations of its Qoin Token
- ASIC has launched legal proceedings against BPS Financial Pty Ltd, claiming that it relayed misleading information about its Qoin token.
- ASIC’s Deputy Chair, Sarah Court, noted that the recent move served as a caution for other crypto asset providers.
- BPS denied that it made misleading representations about its token in its statement.
The Australian Securities and Investments Commission has initiated legal proceedings against BPS Financial Pty Ltd, a provider of Australian crypto assets. They are alleged to have relayed misleading information about Qoin to its 79,000 users.
The financial regulator confirmed the news in a Tuesday press release. It claimed that BPS had engaged in unlicensed conduct using its Qoin token.
BPS is accused in misleading, deceptive or false representations made when marketing the Qoin Facility. This includes that the Qoin Facility (or BPS) comply with financial service laws and that the QoinWallet application is regulated and approved in Australia.
Additionally, Qoin tokens purchased by consumers could be exchanged for crypto-assets and fiat currencies. It also stated that Qoin tokens could be accepted by merchants who are registered with BPS to purchase goods and services.
The token was launched by the crypto asset provider in 2019. It has served as a payment method for merchants since then.
Deterrence for Other Crypto Asset Providers
Sarah Court, Deputy Chair of ASIC, stated that the regulator’s recent action was meant to be a warning to all other crypto asset providers in Australia. Court stated that all Australian providers and issuers crypto assets must comply with existing rules or the agency will continue to track their operations.
“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,” the ASIC deputy chair said
Court stated that crypto issuers must provide investors and consumers with accurate and truthful information. This is due to the high volatility, risk and complexity of crypto investments.
BPS denies misleading users about its Token
Meanwhile, BPS has reacted to the allegations by the country’s financial regulator. The firm stated that it had not made misleading representations about its token.
“We disagree with ASIC’s position and will be defending the matter. BPS had previously consulted ASIC about the structure of Qoin in late 2019, and again in early 2021. BPS will keep the community updated as it is able to,” the crypto provider maintained.
ASIC, on the other hand, requests that the Court inflict severe penalties, injunctions and adverse publicity orders against BPS. However, the date of the hearing’s inauguration has not been set.
On the Flipside
- ASIC’s investigation took an interesting turn after BPS informed users it has been in close contact with the financial regulator since its inception with the Qoin Project, but no questions were raised in the last few years.
Why You Should Care
According to Sarah Court, the ASIC Deputy Chair, the regulator’s recent move has served as a reminder to other crypto asset providers in the country. The agency will continue to monitor the activities of cryptocurrency firms and may require them to comply with stricter regulations in order for them to be able to operate in Australia.
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