Australia’s Watchdog ASIC Suing BFS Financial Limited in a Federal Court

Crypto Regulation
Australia’s Watchdog ASIC Suing BFS Financial Limited in a Federal Court

The Australian corporate watchdog has filed a lawsuit against the Gold Coast-based entity that controls the digital currency, Qoin, claiming that it misled or otherwise deceived over 80,000 users. The Australian Securities and Investments Commission (ASIC) filed a civil penalty proceeding in the Federal Court against BPS Financial Limited.

ASIC: BPS Financial Limited gave misleading representations and false promises

When the business told customers that the digital currency could be swapped for other cryptocurrencies or Australian dollars on an independent exchange, ASIC claims that the firm made false, misleading, or deceptive representations.

Additionally, it alleges that BPS made false, misleading, or deceptive promises when it said that users might use Qoin to buy products and services from an expanding list of companies and merchants that accept the virtual currency.

ASIC asserted that BPS made false, misleading, or deceptive claims regarding Qoin’s compliance with financial services regulations and the registration, regulation, or approval of the application used to conduct the transaction in Australia.

Director of BPS Financial Limited Tony Wiese said in a statement that the business was looking into ASIC’s activities. He added that BPS would defend the case since it disagrees with ASIC’s stance.

“Our priority continues to be the ecology and technological development of the Qoin project.”

Supposed fabrications

Sarah Court, the vice chair of ASIC, said Qoin had misrepresented itself to customers or investors. According to Court, Qoin merchant numbers have been falling. According to her, there were times when it was not feasible to swap Qoin tokens through independent exchanges, contrary to what BPS indicated in its marketing.

“ASIC is especially worried about the alleged false representation that the Qoin Facility is governed in Australia. We believe that the more than 79,000 people and entities who have been issued the Qoin Facility may have assumed that it was able to comply with financial services laws when ASIC perceives it was not.”

However, Ms. Court further said that businesses that were alleged to utilize the coin diminished the coin investors. Despite the early stage of the proceedings, Ms. Court highlighted that the potential fines possibly reach millions of dollars. ASIC will also ask the Federal Court for an order to stop BPS from promoting Qoin the same way it has in the past.

ASIC’s first time

ASIC rose to prominence during their COVID pandemic after releasing a press release citing increased scam cases in the crypto investment sector. This was the first occasion, according to Ms. Court, that ASIC has initiated proceedings looking at a crypto asset category. Whether or not crypto assets are considered financial goods, the entire field of cryptocurrency is still very young. She emphasized that they needed to be extremely explicit about what they were portraying or informing the audience.

This is not the first time we have seen regulatory bodies go after crypto firms. The most common case has been the long ongoing SEC vs. Ripple case. This, however, could prove vital to the accused firm as the cryptocurrency industry is built on trust, which could see many investors migrate from them.