ASIC Issued A Stark Warning To Australian Crypto Asset Providers

The Australian Securities and Investments Commission (ASIC) has issued a stern warning to Australian crypto asset providers as it prepares to file civil actions against Australian business BPS Financial Pty Ltd (BPS) for making deceptive statements about its Qoin coin.

Australia’s financial regulator announced on October 25 that it had launched civil penalty proceedings against BPS Financial for making false, misleading, or deceptive promises to its 79,000 customers concerning its token Qoin.

It claims the corporation participated in unlicensed conduct in connection with Qoin, a digital currency introduced in October 2019 that participating merchants can accept as payment for products and services.

This prosecution, according to ASIC Deputy Chair Sarah Court, should serve as a signal to all crypto issuers that ASIC is watching the crypto industry for misbehavior:

‘”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. Crypto-assets 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 crucial that investors are provided with honest and accurate information.”

The court expressed concern about BPS Financial’s alleged misrepresentation that the Qoin Facility is regulated in Australia and that the token may be used to buy products and services from an expanding number of BPS-registered merchants.

“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 an October 25 post on the Qoin website, BPS denied all wrongdoing, claiming they disagree with ASIC’s viewpoint and will defend the case.

“Before it started, BPS consulted with ASIC in late 2019 regarding the structure of the Qoi project and did so again in early 2021. BPS will keep the community updated as it is able to.”

ASIC is asking the Court for declarations, monetary fines, injunctions, and adverse publicity orders, but no date for the first case management hearing has been set.

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