Australian Court Penalizes BPS Financial $9.3M for Unlicensed Operations
Australia’s Federal Court has ordered BPS Financial to pay a 14 million Australian dollar ($9.3 million) penalty, concluding a multi-year legal battle with the Australian Securities and Investments Commission (ASIC). The court found that between January 2020 and mid-2023, BPS operated an unlicensed financial services business and provided unauthorized financial advice related to its Qoin Wallet, a direct breach of the country's Corporations Act. The total penalty includes a specific fine of $8 million for misleading representations.
In her judgment, Judge Downes characterized the company's behavior as “serious and unlawful misconduct,” highlighting the involvement of senior management and the firm's deficient compliance systems. This ruling establishes a firm precedent for regulatory enforcement in Australia’s digital asset sector, confirming that crypto-related payment products fall under the purview of financial services laws.
BPS Misled Investors on Qoin's Liquidity and Adoption
The court found BPS Financial engaged in misleading and deceptive conduct by making false statements about its Qoin Wallet and the associated Qoin token. The company incorrectly claimed its product was officially registered, that Qoin tokens could be easily converted into fiat currency or other cryptocurrencies, and that a large number of merchants accepted the token for payment. These claims created a false impression of liquidity and utility that did not reflect the product's actual capabilities, exposing investors to significant risk.
ASIC's action underscores the regulator's focus on consumer protection in the crypto space. ASIC Chair Joe Longo emphasized the need for clarity and honesty from providers of high-risk, complex products.
Given the nature of these products, providers must have the appropriate licenses and authorisations, and investors must be able to make decisions based on clear and correct statements.
— Joe Longo, ASIC Chair.
ASIC Bars BPS for 10 Years, Signaling Tougher Oversight
Beyond the financial penalty, the court has prohibited BPS Financial from operating a financial services business in Australia for 10 years without obtaining the proper license. The company is also required to publish court-ordered notices on its Qoin Wallet app and website to inform users of the ruling. This decisive action aligns with ASIC's stated priorities for 2026, which include targeting high-risk investment products and addressing regulatory gaps in the digital asset market.
While this enforcement action demonstrates a crackdown on non-compliant entities, ASIC has also taken steps to streamline certain operations. In December, the regulator simplified rules for the distribution of stablecoins and wrapped tokens, suggesting a nuanced approach that combines strict enforcement against misconduct with efforts to reduce compliance burdens for legitimate operators.
