- ASIC has initiated legal proceedings against BPS Financial Pty Ltd for allegedly relaying 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 responded to the allegations by denying that it gave misleading representations of its token in its statement.
Australian Securities and Investments Commission (ASIC) has commenced legal proceedings against Australian crypto asset provider BPS Financial Pty Ltd for allegedly relaying misleading representations about its Qoin token to its 79,000 users.
The financial regulator confirmed the development in its Tuesday press release and claimed BPS indulged in unlicensed conduct through its Qoin token.
BPS is accused of misleading, deceptive, or false representations when marketing the Qoin Facility, including that the Qoin Facility and/or BPS comply with financial services laws and that the Qoin wallet application is regulated, registered, or approved in Australia.
Additionally, the company claimed that consumers who purchased Qoin tokens could exchange them for other crypto-assets or fiat currency. Moreover, it stated that merchants registered with BPS could accept Qoin tokens for purchasing goods and services.
Recall that the crypto asset provider launched the token in 2019. Since then, it has continued to serve as a means through which merchants acquire payment for goods and services.
Deterrence to Other Crypto Asset Providers
Sarah Court, the Deputy Chair of ASIC, disclosed that the recent move by the regulator manifested to serve as a warning to other crypto asset providers in the country. According to Court, all providers and issuers of crypto assets in Australia must begin to comply with existing rules as the agency will continue to trail 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
According to Court, crypto issuers need to provide consumers and investors with accurate and truthful information. This, in her view, is because of the high volatility, risk, and complexity involved in crypto investments.
BPS Denies Misleading Users About its Token
Meanwhile, BPS has reacted to the allegations by the country’s financial regulator. In its statement, the firm denied that it gave misleading representations of its token.
"We disagree with ASIC’s position and will be defending the matter. Before it started, BPS consulted with ASIC in late 2019 regarding the structure of the Qoin project and did so again in early 2021. BPS will keep the community updated as it is able to,” the crypto provider maintained.
On the other side, ASIC seeks that the Court inflicts severe penalties, injunctions, and adverse publicity orders on BPS. However, the date for the commencement of the hearing has not yet been announced.
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. Consequently, cryptocurrency firms may have to abide by stricter regulations to operate in Australia, as the agency will continue to monitor their activities.
You may also like: