Australian Court Finds BNS Guilty of Unlicensed Crypto Operations

The Federal Court of Australia has ruled in favour of the Australian Securities & Investment Commission (ASIC) in its case against BPS Financial. The latter was found guilty of offering an unlicensed crypto wallet. 

The Federal Court of Australia has delivered a significant ruling that marks a pivotal moment in regulating cryptocurrency in the country. The court has ruled in favour of the Australian Securities & Investment Commission (ASIC) in its case against BPS Financial, which was found guilty of offering an unlicensed crypto wallet.  

The ruling said that BPS Financial violated the Corporations Act and the Australian Securities and Investments Commission Act since January 2020 as it did not hold an Australian Financial Services Licence (AFSL) to issue or offer financial advice about the Qoin Wallet.  

What Does the Court Ruling Say About Qoin Wallet?  

The court found BPS Financial of making false and misleading claims regarding the Qoin Wallet, namely:  

• The Qoin Wallet was officially registered or approved (it was not approved or registered).  

   

• The Qoin Wallet could be used to purchase goods and services from an increasing number of Qoin merchants (it was declined during payments).  

   

• On independent exchanges, the Qoin tokens could be exchanged for other cryptocurrencies or fiat currencies, such as Australian dollars (this was not possible on independent ones).  

“Crypto assets are highly volatile, inherently risky, and complex. This makes it critically important that providers have the appropriate licences and authorisations, and that investors are provided with clear and accurate information. This case is an important reminder that many crypto products are financial products and that providers need to hold a licence,” said ASIC Chair Joe Longo.  

ASIC began its proceedings against the Qoin Wallet in October 2022, and the regulating body secured the ruling in its favour this month. The regulator claimed it was the first ruling against a non-cash payment facility involving cryptocurrency.  

In January 2020, BPS Financial launched Qoin Wallet and its token, blockchain, and payment facility. The platform is a non-cash payment facility that operates through its token, Qoin. It has over 100,000 users and 36,000 merchants. By the end of June 2021, 394 million Qoin tokens were circulated.  

Crypto Regulation & Crypto Adoption Stats in Australia  

The Australian Treasury introduced a proposal paper to regulate crypto platforms in October last year. 

The paper also mentioned that the Australian government only intends to regulate the crypto sector at the exchange level, meaning it does not intend to regulate the cryptocurrency sector. 

The Australian government believes that the existing rules regarding financial services are sufficient to control and regulate the industry. The paper proposed that a crypto exchange with more than $3.2 million in assets, or more than $946 per individual, should obtain an AFSL from the ASIC.  

The industry's friendly regulations have allowed it to flourish. In February 2024, the Independent Reserve Cryptocurrency Index (IRCI) released a report confirming the continuously rising cryptocurrency adoption among Australians.  

• 95% of Australians are aware of at least one cryptocurrency.  
• 27.5% of Australians own or own crypto in the last 12 months.  
• 63% of crypto investors hold Bitcoin (BTC).  
• 25% of Australians view Bitcoin more favourably after the spot Bitcoin ETF approval.  
• 35% of crypto investors put $500 or more monthly into crypto.  
• 69% of Australians consider Bitcoin to be money, a store of value or an investment asset.  
• 39% of Australians believe people and businesses will widely accept crypto.  
• 15% of Australians wanted to invest in crypto but couldn’t due to the economy.  
• Friends and family (49%), in addition to media exposure and a wish to get rich, influence Australians to invest in crypto.  
• 37% of Australian crypto investors report making a profit on their investments.  

So far, traders in Australia can access only two spot crypto ETFs, Global X 21Shares Bitcoin and Ethereum ETFs. Global firms such as VanEck and local firms BetaShares and DigitalX submitted their ETF applications to the Exchange earlier this year. Australia’s largest stock exchange could list approved spot Bitcoin ETFs by the end of 2024.