Australia’s cryptocurrency industry has received a severe warning regarding compliance as the Federal Court fined BPS Financial Pty Ltd (BPS Financial) $14 million for its Qoin Wallet. The company sold Qoin as a digital payment method connected to its token; however, the way it was operated and promoted resulted in major breaches of regulations.
BPS Financial marketed the Qoin Wallet as a cryptocurrency payment method linked to its token, presenting it as a way to conduct regular transactions without using cash. These non-cash payment options are classified as financial services under Australian law and require the appropriate authorisation. While Qoin attracted attention by positioning itself between traditional payments and crypto, the legal framework behind it did not align with how it was marketed, raising serious regulatory concerns.
BPS Financial was found by the Federal Court to have operated the Qoin Wallet and provided financial advice for nearly three years without holding the required Australian Financial Services Licence (AFSL), a clear breach of the law. The company argued it could rely on an authorised representative exemption under the Corporations Act. However, in 2025, the Full Federal Court rejected this claim, ruling that the exemption did not apply during an additional ten‑month period.
The Court determined that BPS Financial had falsely claimed that the Qoin Wallet had official approval or registration, misrepresented the number of Qoin users, and made exaggerated statements regarding whether tokens could be exchanged for cash or other cryptocurrency. These actions were viewed as serious breaches of trust because they gave customers false confidence.
BPS Financial was fined $14 million by the Federal Court, with $2 million for operating without the necessary licence and $12 million for deceptive conduct. The ruling highlighted issues such as careless behaviour, senior management’s involvement, and inadequate compliance mechanisms.
In 2024, the Federal Court determined that BPS Financial had misled customers and operated without a licence between January 2020 and mid‑2023. The Full Federal Court’s confirmation of the misconduct continuing for a further ten months the following year established the company’s ultimate penalty.
Justice Downes stated that BPS Financial engaged in serious and unlawful wrongdoing over a period of more than three years. The Court noted that senior management was directly involved and that the actions demonstrated objective recklessness, meaning the company should have recognised the risks and taken appropriate action.
The Court imposed permanent restrictions on BPS Financial, preventing it from making false claims about Qoin users, token exchangeability, or official approval. It also enforced a ten‑year ban on operating a financial services business without a licence and ordered the company to issue adverse publicity notices while covering most of Australian Securities and Investments Commission’s (ASIC) legal costs.
ASIC Chair Joe Longo emphasised that the penalties against BPS Financial are intended to deter misconduct and protect investors from misleading information. While innovation in cryptocurrency is welcome, he stressed that consumer safety must not be compromised.
Longo stated, “ASIC will not hesitate to act where investors are potentially exposed to unlicensed financial advice, misleading and deceptive conduct, and risky products. The digital asset industry is well on notice that its products will continue to be a focus for ASIC. We want to encourage innovation and new services for consumers, but not at their expense.”
The case highlights how Australia’s cryptocurrency sector must adhere strictly to regulations, with no room for error. Companies must always provide clear, accurate, and verifiable information in order to operate transparently. Crypto products remain highly volatile and complex, posing risks for consumers who may not fully understand them. Misleading claims can lead to poor investment decisions and erode trust in the market, making it harder to protect and restore consumer confidence.
