Australian federal court hits BPS Financial with $9.3M fine over unlicensed crypto business

Australia’s financial regulator scored a significant victory in court against BPS Financial. The financial firm has been ordered to pay 14 million Australian dollars ($9.3 million) in penalties for offering unlicensed financial services and making false claims about its Qoin Wallet cryptocurrency product.

This comes after a long legal battle led by the Australian Securities and Investments Commission (ASIC). The ASIC claimed that BPS Financial breached the Corporations Act by promoting and running its Qoin Wallet product.

Federal court ruled that BPS ran a crypto wallet without a license

The Federal Court found that BPS Financial operated the Qoin Wallet from January 2020 to mid-2023 without the Australian Financial Services Licence. This license is required for businesses that provide or deal in regulated financial products.

At the same time, the court found that BPS also offered financial services and advice regarding the Qoin Wallet and the Qoin digital token, even though the company lacked the legal authority to do so. This put the company in breach of the Corporations Act.

The court heard the defence that BPS presented, namely that it relied on the “authorized representative” exemption under Australian law, and rejected it. The judges issued a 2024 ruling that the exemption didn’t apply to how BPS issued, promoted, and managed the Qoin Wallets. They even confirmed the decision after an appeal in 2025.

According to the court, BPS was solely responsible for holding the right license because of how it designed and offered the product to users.

Because the unlicensed conduct went on for years, the court was not lenient in its ruling. Justice Downes even said the company was responsible for assessing its legal obligations and ensuring it complied with all laws before releasing the product to the public. He even said that senior management must have been involved because they did nothing to stop the movement.

According to ASIC Chair Joe Longo, the ruling showed that crypto-related products are not exempt from the same financial services laws that other products have to adhere to when they operate like payment or investment services. He said these products can be complex, risky, and confusing to everyday users, so companies must hold all the right licenses and meet disclosure standards.

Judges found that BPS misled users about the Qoin Wallet

The court found that BPS Financial deliberately misled and deceived the public by making false claims about the Qoin Wallet and the Qoin digital token, which were central to the product’s promotion to customers.

Judges noted that BPS stated the wallet was officially approved or registered and that Qoin tokens could be easily exchanged for fiat currency or other crypto assets. The company also claimed that the token was generally accepted by merchants, even though all these claims were false.

According to the court, these statements gave the Qoin Wallet a false impression of safety and legitimacy, which may have led users to trust the product and use it without fully understanding how it actually works.

Judges also acknowledged that most retail users heavily rely on company claims when assessing crypto products. They explained that this is particularly true because such products tend to be complex and volatile, and it is challenging to evaluate them without clear, accurate information.

Given the type of deceptive behavior revealed, the court decided to allocate the largest portion of the total fine to BPS Financial for those dishonest representations.

Downes J remarked that the magnitude of the sanction was a mirror of the gravity of the statements and the objective recklessness that their making entailed. He also said it proved the involvement of senior executives who either approved or allowed such claims to be made in the first place.

Aside from monetary fines, the court also severely punished BPS Financial to reduce its future risks to consumers.

The firm was prohibited from running a financial services business without a license for 10 years. It was also ordered to post court-mandated warning notices on the Qoin Wallet app and website. The judge further directed BPS to bear the majority of ASIC’s court costs.

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