- Australia has set a precedent for crypto in non-cash payments.
- The precedent emanated from a ruling in ASIC’s case against BPS.
- The case is still ongoing.
Justice Downes of Australia’s Federal Court has set a judicial precedent clarifying the legality of non-cash payment facilities involving cryptocurrency assets.
On May 3, the Australian Securities & Investments Commission (ASIC) announced its first court win against BPS Financial Pty (BPS), a company the regulator accused of advertising Qoin tokens as a mode of payment via Qoin Wallet for goods and services offered by Qoin Merchants.
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In delivering judgment, the court highlighted the legal shortcomings of BPS’s crypto-based, non-cash payment product.
When Crypto Is Illegal in Non-Cash Payments
According to the announcement, Justice Downes found that BPS’s offering contravened Australia’s Corporations Act as the company did not hold an Australian Financial Services License, “nor was authorized by a licensed holder to provide financial advice about the Qoin Wallet.”
Pointing out deceptive promotion, the court noted that BPS misrepresented that the Qoin wallet was officially registered when it was not and that it could be used to acquire goods and services from an “increasing number of Qoin merchants,” when in fact “it was declining.”
The court further established that BPS misled its customers that they could exchange Qoin tokens for fiat or other cryptocurrencies 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 stated.
Per ASIC Chair Joe Longo, the ruling has set a significant precedent in Australia’s crypto industry by clarifying what a regulated product constituted and when the underlying provider needed a license.
Following the first outcome, the court directed ASIC and BPS to “confer with respect to directions” that may be made for further hearings.
Read about Australia’s plans for a Bitcoin ETF:
Australia Mulls Bitcoin ETF to Bolster Crypto Hub Ambitions
Stay updated on BTCC’s massive crypto trading contest:
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