The Australian Securities and Investments Commission (ASIC) revealed on October 25 that BPS Financial Pty Ltd (BPS) Financial had been subject to civil penalty proceedings for making “deceptive representations” to its 79,000 customers concerning its token Qoin.
After initiating legal actions against BPS, the banking authority issued a stern warning to other Australian crypto asset issuers. The corporation is accused of engaging in “unlicensed conduct” in relation to Qoin, a cryptocurrency that was introduced in October 2019. It enables participating businesses to accept the digital token as a payment for goods and services.
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. Because “crypto-assets are extremely volatile, intrinsically dangerous, and complex,” she continued, “it’s crucially necessary that consumers and investors are given honest and accurate information.” She continued by explaining that because each cryptocurrency asset is unique, it is generally difficult to compare them to one another or to anything else.
She further asserted that ASIC places a high priority on taking targeted action against illegal activity and deceptive marketing of financial products including crypto assets that may endanger customers.
The court stated that it was especially concerned about BPS Financial’s alleged deception that the Qoin Facility is governed in Australia and that the token can be used to buy products and services from an expanding number of businesses affiliated with BPS.
Over the past few months, the Australian regulator has increased its investigation of the cryptocurrency industry. ASIC chairman Joe Longo expressed concern in August about the number of people who remain invested in “unregulated, volatile” after buying it during the COVID-19 pandemic. 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.
On October 17, the Australian Securities and Investments Commission (ASIC) said that it had filed temporary restraining orders against three cryptocurrency funds managed by Australian asset manager Holon. Each of these funds aspires to invest in Bitcoin (BTC), Ether (ETH), and Filecoin (FIL).