The Australian Securities and Investments Commission (ASIC) is suing BPS Financial Pty Ltd for allegedly making false and misleading promotions for its Qoin crypto token.
The Australian Securities and Investments Commission (ASIC) declared on October 25 that BPS Financial had been subject to civil penalty proceedings for making “false, misleading, or deceptive claims” to its 79,000 users regarding their cryptocurrency Qoin.
In relation to Qoin, a digital currency introduced in October 2019 that enables participating businesses to accept it as payment for products and services, it is alleged that the corporation participated in “unlicensed conduct.”
The case, according to ASIC Deputy Chair Sarah Court, should serve as a reminder to all cryptocurrency issuers that ASIC is keeping an eye out for unethical behavior in the market.
This is a top priority for ASIC. “Where it fits within our remit, ASIC will take targeted action against unauthorized behavior and misleading promotion of crypto-asset financial products that potentially harm consumers.”
She continued by stating how critical it is that investors and consumers are “Because “Crypto-assets are extremely unpredictable, intrinsically dangerous, and complex,” they should be “given with honest and accurate information.” Because each cryptocurrency asset is unique, it can frequently be challenging to compare them to one another or to anything else.”
The claim that the Qoin Facility is licensed in Australia and that the token can be used to buy products and services from an expanding list of merchants registered with BPS Financial has reportedly caused special worry for the court.
“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.”
In a statement posted on the Qoin website on October 25, BPS said they disagreed with “ASIC’s perspective” and “will be defending the matter,” and they denied all misconduct.
“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.”Â
The date for the initial case management hearing has not yet been set, but ASIC is asking the Court for declarations, monetary fines, injunctions, and orders against adverse publicity.
Over the past few months, the Australian regulator has increased its investigation of the cryptocurrency industry. The number of people who bought “unregulated, volatile” crypto assets during the COVID-19 crisis alarmed ASIC chief Joe Longo in August.
The lack of awareness among ordinary investors at the time, he claimed, made “a strong case for regulation of crypto-assets to better safeguard investors,” given the “minimal protections” that exist for consumers.
The corporate watchdog is not the first to seek legal redress for BPS. Salerno Law, a Queensland-based law company, filed a claim for $100 million in damages against BPS in late 2021 on behalf of merchants, investors, and holders who had lost money after purchasing the Qoin utility token, alleging that BPS had engaged in misleading and deceptive conduct.
