The Australian Securities and Investments Commission (Asic) has taken legal action against cryptoasset firm BPS Financial.
According to the regulator, the company has made false, misleading or deceptive representations about its products and engaged in “unlicensed conduct” in relation to a non-cash payment facility involving a crypto-asset token called Qoin.
Over 79,000 consumers were issued with the Qoin facility and the watchdog is worried they may have been misled.
Asic alleges that in its marketing of Qoin, BPS made false and/or misleading statements, including that:
- Consumers who have purchased Qoin can be confident that they will be able to exchange them for other cryptoassets or other currency (such as Australian dollars) via independent exchanges;
- Qoin can be used to purchase goods and services from an increasing number of merchants registered with BPS;
- The Qoin facility and/or wallet application used to transact the tokens are regulated, registered and/or approved in Australia; and
- The Qoin facility and/or BPS are compliant with financial services laws.
‘Targeted action’
Asic deputy chair Sarah Court said: “We allege that, despite what BPS represented in its marketing, Qoin merchant numbers have been declining, and that there have been periods of time where it was not possible to exchange Qoin tokens through independent exchanges.
“Asic is particularly concerned about the alleged misrepresentation that the Qoin facility is regulated in Australia, as 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.
“Where it falls within our remit, Asic will take targeted action against unlicensed conduct and misleading promotion of crypto-asset financial products that could harm consumers – this is a key priority for Asic.
“Cryptoassets are highly volatile, inherently risky, and complex. Every crypto-asset is different, often making it difficult to compare with each other – or anything else. This makes it crucially important that investors are provided with honest and accurate information.”
The regulator is now seeking declarations, fines, injunctions and adverse publicity orders against BPS.
