Corporate plod pings Qoin owner

The corporate policeman has had a big win against the Gold Coast-based owner of Bartercard and cryptocurrency Qoin.

The Federal Court has found BPS Financial Pty Ltd engaged in unlicensed conduct when it offered customers the “Qoin Wallet”, a non-cash payment facility using the crypto-asset token Qoin. 

Image courtesy of Facebook | Victoria Street Deli Bunbury

The corporate watchdog ASIC brought a case against BPS in 2022 and Federal Court Justice Kylie Downes has now handed down her judgement.

Justice Downes found that the company, with the exception of a period of 10 months, had contravened the Corporations Act since January 2020 because it did not hold an Australian Financial Services Licence.

Justice Downes also found BPS engaged in misleading or deceptive conduct and made false or misleading representations concerning the Qoin Wallet.

Among the claims BPS had made was that:

·       The Qoin Wallet was officially registered or officially approved when it was not,

·       The Qoin Wallet could be used to purchase goods and services from an increasing number of Qoin merchants, when in fact it was declining, and

·       Consumers who purchased Qoin tokens could be confident that they would be able to exchange them for other crypto-assets, or currency such as Australian dollars, through independent exchanges.

The Court found the only digital currency exchange that accepted Qoin prior to November 2021 was BTX Exchange, which was not independent of BPS and did not permit crypto assets to be exchanged with each other.

ASIC Chairman Joe Longo said the case was a significant win for the watchdog.

“ASIC has taken a number of enforcement actions against crypto asset businesses with the intention of clarifying what is a regulated product and when the provider needs a licence,” Mr Longo said.  

‘Crypto assets are highly volatile, inherently risky, and complex. This makes it critically important that providers have the appropriate licences and authorisations, and that investors are provided with clear and accurate information.

“This case is an important reminder that many crypto products are financial products and that providers need to hold a licence.

‘These proceedings should send a message to the crypto industry that their products will continue to be scrutinised by ASIC to ensure consumers are protected and that they comply with regulatory obligations.”

The Court has directed the parties to enter talks about further questions in the case, including penalties, later