In a Tuesday press release, the Australian Securities and Investments Commission (ASIC) announced it has commenced civil penalty proceedings against BPS. BPS is accused of making various misleading, false or deceptive claims while marketing its token Qoin.
ASIC Commences Civil Proceedings Against BPS
In its complaint, ASIC accuses BPS of two main infractions. The Australian regulator alleges that the offending company misleads investors that its token can both be used with an “increasing number of merchants,” and could easily be exchanged for numerous other crypto, and traditional currencies.
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.
In an accusation reminiscent of recent US actions against Nexo, ASIC also alleges BPS claimed it was registered and compliant with regulatory requirements. The Australian regulator’s Deputy Chair Sarah Court points to these allegations as exceptionally concerning. Court stated that her agency believes that “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.”
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BPS Responds to the Accusations
Shortly after ASIC’s actions were revealed, BPS published its response. The company stated that it strongly disagrees with the regulator’s stance. and intends to defend the matter. BPS took the opportunity to explain it has actively been consulting ASIC on the matter of Qoin both in 2019 and 2021.
During the past 24 hours, BPS Financial Pty Ltd “BPS” received a notice from ASIC that it has commenced an originating process in the Queensland registry of the Federal Court.BPS is reviewing the allegations. ASIC alleges that BPS has been engaging in unlicensed conduct in relation to a non-cash payment facility involving the Qoin crypto asset and, flowing from that alleged unlicensed position, BPS has consequently made false or misleading representations. BPS does not agree with ASIC’s position and, confident of its position, will be defending the matter.
Following the example of numerous other regulators in 2022 across the world, ASIC has been watching the crypto sector more closely. Its action against BPS is the Australian regulator’s second major move with regard to digital assets companies this October. On the 17th, the regulator halted three crypto funds due to “non-compliant target market determinations,” and in an effort to “protect retail investors” from investing in potentially unsuitable funds.
Do you think BPS will truly prove willing to “defend the matter” in court? Let us know in the comments below.
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