The Australian Securities and Investment Commission (ASIC) has brought civil penalty proceedings in the Federal Court against BPS Financial Pty Ltd, one of the asset management firms operating in the country.
According to a press release shared by the regulator, BPS Financial made a number of false and misleading statements about Qoin Financial tokens which it allegedly distribute to 79,000 investors.
As noted by ASIC, BPS Financial marketed the Qoin token by promising that those who hold the coin can exchange them for other financial assets including the Australian Dollar on independent exchanges. While BPS also alleges that the Qoin token can be used to purchase goods and pay for services from merchants it is in partnership with, it claimed that the wallet and crypto product of the Qoin token were regulated by relevant authorities.
The Aussie regulator came to find out that none of the claims of the company are true and that is contrary to the claims, the products were not licensed, and neither were token holders able to liquidate their holdings as promised on independent brokerage firms.
“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,” said ASIC Deputy Chair Sarah Court, “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.”
Effectively, ASIC is seeking declarations, pecuniary penalties, injunctions, and adverse publicity orders from the Court. The regulator has been playing a more active role in the industry and recently halted 3 crypto funds belonging to Holon Investments in a bid to protect consumers.