Australian SEC Charge Qoin Token Promoter for Deceptive Marketing

• ASIC commenced civil penalty proceedings against BPS Financial.
• The business allegedly made false, misleading representation of unlicensed products.
• ASIC deputy claimed BPS fooled over 79,000 people.

Australia’s markets regulator filed a lawsuit in a federal court against BPS Financial for engaging in an unlicensed virtual asset business, according to a press statement.

The Australian Securities and Investments Commission (ASIC) alleged that BPS Financial employed misleading and deceptive means in marketing a crypto asset called Qoin Facility. The regulator claimed the company promised consumers who purchased Qoin tokens that they would be able to exchange them for other crypto assets or fiat currencies through independent exchanges. According to the regulator, the firm also told customers that the token would be tenable to an increasing number of merchants.

ASIC Deputy Chair Sarah Court argued that contrary to what BPS indicated in its marketing, Qoin merchant numbers have been falling and that there have been times when it was not feasible to swap Qoin tokens through independent exchanges.

Interestingly, the ASIC deputy noted that the regulator is mainly concerned about a false claim that the Qoin Facility operated under the regulation of Australian authorities, fooling over 79,000 people and entities into investing in the token.

The statement read:

We believe 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

A media house quoted BPS Financial saying it “does not agree with the ASIC’s view,” vowing to contest the case at the court. Last year, the leading blockchain body in Australia, Blockchain Australia (BCA), ejected Qoin from its membership list without clarifying the reason.