Australian Court ruling against BPS Financial highlights need for compliance
The recent ruling by Justice Downs against crypto company BPS Financial for violating financial services law in Australia has shed light on the importance of regulatory compliance in the cryptocurrency industry.
According to the court’s findings, BPS Financial had been operating without the necessary license since January 2020, offering financial services and advising on the use of the Qoin Wallet. The Australian Securities and Investments Commission (ASIC) accused the company of misleading clients by making false claims about the Qoin Wallet and its approval status.
ASIC’s legal proceedings revealed that Qoin tokens could only be exchanged on the BTX Exchange, which was linked to BPS Financial, until November 2021. Despite this, the company managed to raise over $40 million through Qoin token sales by promoting them to retail consumers and business owners as a means of electronic payment.
The Court’s ruling classified the Qoin Wallet as a financial product, emphasizing the need for cryptocurrency service providers to obtain licenses and provide accurate information to investors. ASIC Chairman Joe Longo reiterated the importance of regulatory compliance in the cryptocurrency industry to safeguard consumers from potential risks.
As discussions on fines and other consequences are scheduled to take place in 2024, it is evident that Australian authorities are keen on implementing regulatory measures to protect users from losses and fraud within the cryptocurrency sector.
