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Australian federal court ruling in favor of ASIC against unlicensed Qoin Crypto

The ruling may serve as a warning to other cryptocurrency companies that may be unaware of the need for proper permits and licenses to operate legally.

Date: 2024-05-07 Author: Łukasz Michałek
Australian federal court ruling in favor of ASIC against unlicensed Qoin Crypto

On Friday, an Australian federal court ruled in favor of the Australian Securities and Investments Commission (ASIC) in the case of an unlicensed crypto platform that misled customers.

The court noted that Gold Cost cryptocurrency promoter BPS Financial allegedly broke the law by promoting an unlicensed cryptocurrency wallet. The company misled customers by offering “Qoin Wallet,” a cashless payment method using a cryptocurrency token called “Qoin.”

ASIC Chairman Joe Longo warned of the highly volatile and risky behavior of crypto assets, stressing the importance of authorized licenses. “It is critical that providers are properly licensed and authorized, and that investors receive clear and accurate information,” he said.

Longo also stressed that ASIC is constantly taking enforcement actions against unlicensed cryptocurrency companies.

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Judge Downes noted that BPS violated the Companies Act because it did not have an Australian financial services license. He also found that the company misled customers by making false statements about Qoin Wallet.

ASIC’s indictment of controversial cryptocurrency Qoin

Qoin was launched in Australia in early 2020 and provides multiple returns to those who invest in it. One of the company’s claims is to display an officially registered Qoin wallet, which was not the case.

Earlier, business owners expressed uncertainty about the future of the digital currency. Concerns were raised about possible misinformation and the inability of some of its customers to withdraw funds.

As a result, the Australian regulator launched a lawsuit alleging that advertisements promoting Qoin misled consumers by creating a false impression. The ads promised that investors could confidently exchange Qoin for other currencies and that there were merchants who accepted it.

More than 79,000 individuals and entities who bought Qoin may have believed that the product complied with financial services regulations. However, in 2022 ASIC alleged that this was not the case, filing civil criminal proceedings against BPS Financial in the Federal Court.

“This is an important case for us because it’s actually the first time we’ve brought legal proceedings alleging that an offering of crypto assets, so in this case the Qoin instrument… is a financial product being offered,” said ASIC Deputy Chair Sarah Court.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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