Australia’s crackdown on misleading crypto conduct intensified after the Federal Court of Australia ordered BPS Financial Pty Ltd to pay A$14 million (about $9.7 million) following a prolonged enforcement case brought by the Australian Securities and Investments Commission (ASIC).
The court found that BPS engaged in unlicensed and misleading conduct while operating and promoting its Qoin Walletproduct between January 2020 and mid-2023. Judges concluded that the company repeatedly misrepresented the product’s regulatory status, functionality, and market acceptance, while also providing financial services without the required authorization.
Penalties reflect scope and duration of misconduct
The A$14 million sanction was split across two categories, reflecting both consumer harm and licensing breaches. Of the total, A$12 million was imposed for making false, misleading, and deceptive representations to users, particularly around claims of approval, usability, and adoption. A further A$2 million penalty addressed BPS’s operation of a financial services business and provision of financial advice without holding an Australian Financial Services Licence (AFSL).
Beyond financial penalties, the court imposed sweeping restrictions designed to prevent repeat behavior. BPS faces a 10-year prohibition on conducting any financial services business without proper licensing. Permanent injunctions bar the firm from making future claims about token exchangeability, user numbers, or regulatory standing that cannot be substantiated. The company must also display prominent warning banners and pop-up notices across the Qoin Wallet app and its website, and it has been ordered to pay 90% of ASIC’s litigation costs.
Misleading claims at the center of the case
The ruling outlined several core representations that the court deemed reckless and deceptive. BPS claimed the Qoin Wallet was registered or approved by Australian authorities, a statement found to be false. Users were also led to believe Qoin tokens could be readily exchanged for other cryptocurrencies or Australian dollars through independent exchanges, despite the absence of such liquidity. In addition, the company promoted growing merchant adoption, even as evidence showed participation was declining.
These claims, the court found, materially influenced consumer decisions and masked the true risks and limitations of the product.
Regulatory signal for the crypto sector
ASIC Chair Joe Longo said the size of the penalty underscores the seriousness of the misconduct and is intended to act as a deterrent for the digital asset industry in 2026. The outcome reinforces ASIC’s long-standing position that crypto products operating as payment mechanisms or investment-like services fall squarely within existing financial laws.
The case sends a clear message to market participants: innovative technology does not exempt firms from licensing, disclosure, and consumer protection obligations. As regulatory scrutiny continues to tighten, compliance failures in the crypto sector are increasingly being met with penalties comparable to those imposed on traditional financial institutions.
