Company in court over crypto-asset token
Civil court action has been launched against BPS Financial for allegedly making false or misleading representations to almost 80,000 users about a crypto-asset token called the Qoin Facility.
The Australian Securities and Investments Commission also alleges BPS engaged in unlicensed conduct.
It is alleged that in marketing Qoin, BPS made deceptive representations, including that consumers could exchange them for other crypto-assets or currency such as Australian dollars through independent exchanges.
BPS also allegedly claimed Qoin tokens could be used to purchase goods and services from registered merchants, that the Qoin application was regulated and registered in Australia, and that they were compliant with financial services laws.
“We allege that, despite what BPS represented in its marketing, Qoin merchant numbers have been declining and that there have been periods of time where it was not possible to exchange Qoin tokens through independent exchanges,” ASIC deputy chair Sarah Court said.
“ASIC is particularly concerned about the alleged misrepresentation that the Qoin Facility is regulated in Australia, as we believe the more than 79,000 individuals and entities who have been issued with the Qoin Facility may have believed that it was compliant with financial services laws, when ASIC considers it was not.”
Ms Court said crypto-assets were highly volatile, inherently risky and complex.
“Where it falls within our remit, ASIC will take targeted action against unlicensed conduct and misleading promotion of crypto-asset financial products that could harm consumers – this is a key priority for ASIC,” she said.
“Every crypto-asset is different, often making it difficult to compare with each other – or anything else.
“This makes it crucially important that investors are provided with honest and accurate information.”
In a statement, BPS director Tony Wiese said the company was reviewing ASIC’s actions.
“BPS does not agree with the position of ASIC and will be defending the matter,” he said.
“Our focus remains to develop the Qoin project technology and ecosystem.”
ASIC is seeking penalties, injunctions and adverse publicity orders from the Federal Court.
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