The Australian Federal Court has ordered digital currency payments provider BPS Financial to pay total pecuniary penalties of $9.7 million (AUD$14 million) following a lengthy legal battle over the unauthorized promotion and operation of its Qoin Wallet crypto product. The total fine reflects two major areas of misconduct identified by the Australian Securities and Investments Commission (ASIC).
According to an ASIC statement, the court assigned $1.39 million for unlicensed conduct, noting that BPS operated without an Australian Financial Services License for nearly four years. The remaining $8.31 million was ordered for misleading and deceptive conduct, specifically regarding false statements made to the public about the wallet’s functionality.
Furthermore, the court permanently barred BPS Financial from making further false or misleading representations about the Qoin Wallet or Qoin tokens. This injunction specifically prohibits the company from misrepresenting the number of wallet holders, claiming that Qoin tokens can be easily exchanged for fiat currency or other crypto-assets, or suggesting that the product has received official government approval or registration.
The company has also been restrained for 10 years from carrying on any financial services business without a proper license. BPS must also publish an “adverse publicity notice” across its platforms to ensure current and potential users are fully aware of the legal findings.
Read more: Australian Regulator Updates Guidance Classifying Digital Assets as Financial Products
ASIC Chair Joe Longo said the size of these penalties underscores the seriousness of the company’s misconduct. He emphasized that providers must have appropriate licenses and that investors must be able to make decisions based on clear, correct statements, especially given the inherently risky nature of crypto products.
Justice Downes, in her judgment, described the company’s actions as “serious and unlawful misconduct” that took place between early 2020 and mid-2023. She noted that the heavy fine for misleading representations was necessary to account for the “objective recklessness” of the conduct and the direct involvement of senior management.
Beyond the multimillion-dollar penalties, the court ordered BPS to cover most of the legal costs incurred by ASIC during the proceedings. As the digital asset industry remains a primary focus for regulators, this case highlights that innovation will not be tolerated at the expense of consumer safety and legal transparency.
- What was BPS Financial fined for? Operating without a license and misleading investors about its Qoin Wallet.
- How much is the penalty? The Australian Federal Court ordered BPS to pay AUD$14 million in total fines.
- What restrictions were imposed? BPS is banned from unlicensed financial services for 10 years and from false claims about Qoin.
- Why is this ruling important? ASIC says it reinforces that crypto providers must be licensed and transparent to protect consumers.
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