Australian court supports ASIC in legal action against Qoin scheme

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Australian court supports ASIC in legal action against Qoin scheme

In a significant legal decision, the Australian courts largely sided with Australia’s markets regulator, the Australian Securities and Investments Commission (ASIC), in relation to BPS Financial Pty Ltd (BPS) and its Qoin scheme.

Judge Downes’ ruling, which has far-reaching implications for the financial sector, highlights the importance of regulatory oversight in protecting investors and maintaining the integrity of financial markets. The fight began in October 2022 when ASIC accused BPS of misleading and deceptive conduct in relation to the entire Qoin project, tokens, blockchain and wallet offering.

ASIC ensures BPS complies with regulatory standards

Qoin schemes, sold as digital currencies or cryptocurrencies, have attracted the attention of authorities due to concerns about legality and compliance with financial regulations. The security watchdog also alleged BPS was in breach of the country’s corporate laws because it was not registered under the Australian Financial Services License. It was also claimed that the licensee was not authorized to provide such services to its customers.

ASIC alleged that BPS Financial Pty Ltd acted misleadingly by promoting Qoin as a legitimate digital currency while failing to disclose material information to consumers. The court’s decision largely supports ASIC’s position, emphasizing the need for transparency and honesty in the provision of financial products.

Meanwhile, as part of the case, the court disagreed with ASIC’s argument that the Qoin blockchain and Qoin wallet constituted a single scheme. Although ASIC has claimed otherwise, it is important to note that the Qoin blockchain and the means of acquiring Qoin and registering as a Qoin seller are not an integral part of the mechanism that allows users to make non-cash payments.

The order directs Australian regulators and BPS to agree a resolution to resolve remaining issues, including fines, which will be levied later this month.

Australian watchdog cracks down on cryptocurrency

The US Securities and Exchange Commission (SEC) is known for its relentless cryptocurrency enforcement actions, but ASIC is not far behind.

Australian regulators began investigating and prosecuting several cryptocurrency companies last year. In February 2023, Binance began investigating Binance for wrongful closure of derivatives accounts due to false classification. A few months later, regulators revoked the license granted to Binance through its local subsidiary Oztures Trading Pty Ltd. Notably, ASIC’s press release states that Binance has requested a withdrawal.

As Coinspeaker reported in July 2023, the Commission revoked FTX Australia’s license in November 2022 after its parent company declared bankruptcy. It was claimed that the Australian branch did not receive approval directly from ASIC, but through multiple acquisitions.

However, ASIC’s legal victory highlights its ongoing efforts to combat illegal cryptocurrency activity in Australia, protect investor interests and ensure the integrity of financial markets.next

Australian court supports ASIC in legal action against Qoin scheme

Source: https://www.coinspeaker.com/australian-court-asic-qoin/