Australia’s corporate watchdog, the Australian Securities and Investments Commission (ASIC), has secured a major court win against BPS Financial Pty Ltd. The Federal Court ordered the company to pay A$14 million (approximately $9.3 million) in penalties for running the Qoin Wallet product without a required license and for misleading users. Justice Downes described the conduct as “serious and unlawful misconduct,” noting senior management involvement and inadequate compliance systems.
Two-and-a-half years of unlicensed operation
ASIC’s investigation revealed that between January 2020 and mid-2023, BPS Financial issued the Qoin Wallet and provided financial services linked to its Qoin digital token without holding an Australian Financial Services Licence (AFSL). The court found the product functioned as a non-cash payment facility, yet the company failed to meet mandatory licensing obligations. For this unlicensed conduct alone, the court imposed a penalty of A$1.3 million.
Inflated liquidity and false merchant acceptance claims
The larger penalty came from misleading representations. BPS claimed during promotions that the Qoin Wallet had official approval or registration, that Qoin tokens could be easily exchanged for fiat or other crypto assets, and that the token was widely accepted by merchants across Australia. These statements were later rejected by the courts on appeal, with judges ruling that they significantly overstated the token’s liquidity and real-world usability. For these deceptive practices, the court handed down an additional A$8 million fine.
ASIC Chair Joe Longo stressed afterwards: “Licensing safeguards are essential for high-risk crypto products.” He noted that consumers had relied on unclear and inaccurate information, and that regulatory action was needed to protect retail users.
10-year ban and broader operational impact
Beyond the financial penalty, the court imposed a 10-year restriction on BPS Financial, barring the company from operating any licensed financial services. This effectively locks the firm out of Australia’s digital finance sector for a decade. Additionally, BPS must publish court-ordered notices on its Qoin Wallet app and website to warn existing and potential customers, and must pay most of ASIC’s legal costs.
Meanwhile, ASIC is updating its broader digital asset framework. Recent exemptions have simplified stablecoin and wrapped token distribution, reducing some licensing burdens while maintaining record-keeping oversight. In its “Key issues outlook 2026” report, the regulator also flagged opaque private credit exposure, superannuation failures, high-risk investment sales, AI-related consumer harm, and fintech regulatory gaps.
The BPS Financial case signals a firm enforcement stance. Crypto and payment firms now face escalating pressure to align innovation with licensing, disclosure, and compliance requirements.