- Misleading claims about Qoin’s approval, liquidity and merchant acceptance were confirmed.
- The court imposed financial penalties, public notices and a long-term ban on operating.
- ASIC is easing some crypto licensing requirements while maintaining enforcement pressure.
Australia’s lengthy legal battle with BPS Financial has ended in a decisive ruling that highlights regulatory gaps in the country’s crypto and digital payments sector.
The Federal Court has ordered BPS Financial Pty Ltd to pay AUD 14 million in penalties for operating its Qoin wallet without the required licence and for making misleading claims about the product.
The case, brought by the Australian Securities and Investments Commission (ASIC), focused on whether BPS crossed the line from being a technology provider to acting as an operator of financial services.
The court found that it did.
By promoting and issuing the Qoin wallet as a non-monetary payment facility linked to its digital token Qoin, BPS was found to have engaged in regulated conduct without holding an Australian Financial Services Licence, in breach of the Corporations Act.
How Qoin entered the regulated space
Between January 2020 and mid‑2023, BPS promoted the Qoin wallet as a way for users to transact using Qoin tokens through a network of merchants.
The court concluded that this activity went beyond a mere software product. It amounted to issuing a payment facility and providing financial services and advice—activities that require licensing in Australia.
ASIC argued that the wallet’s structure and promotion encouraged consumers to treat it as a practical alternative to traditional payment methods.
The court agreed, finding that the lack of a licence during that period placed the product outside Australia’s legal framework for consumer protection.
Misleading claims subjected to scrutiny
The court also upheld findings that BPS engaged in misleading and deceptive conduct.
Earlier rulings in 2024, which were upheld on appeal in 2025, found that the company made false statements about Qoin’s status and functionality.
These statements included claims that the product was officially approved or registered, that Qoin tokens could be readily exchanged for fiat currency or other crypto assets, and that the token was widely accepted by merchants.
The court considered that these representations created a misleading impression of liquidity, acceptance and regulatory endorsement.
ASIC initiated civil penalty proceedings in 2022 after concluding that such claims were likely to influence consumer decisions.
The Federal Court imposed penalties totalling AUD 14 million, including AUD 1.3 million for unlicensed conduct and AUD 8 million for misleading representations.
The court also barred BPS from operating an unlicensed financial services business for 10 years, ordered corrective notices to be published in the Qoin Wallet app and on the website, and required the company to pay most of ASIC’s legal costs.
Justice Downes described the conduct as serious and unlawful, noting senior management’s involvement and weak internal compliance systems.
An expanding compliance gap
The BPS decision comes as ASIC adjusts parts of its crypto regulatory approach.
In December, the regulator finalised exemptions intended to simplify the distribution of stablecoins and wrapped tokens.
Those measures allow the use of omnibus accounts with appropriate record-keeping and remove the need for some intermediaries to hold separate Australian Financial Services licences.
The changes aim to reduce compliance costs for firms operating in digital assets and payments.
In a report published on Tuesday titled Key Issues Outlook 2026, ASIC Chair Joe Longo identified digital assets and fintech as areas where regulatory gaps remain.
The report also flagged risks related to opaque private credit, operational failures in retirement systems, sales of high‑risk investments and consumer harm associated with AI.
Taken together, these developments show a regulator trying to strike a balance between flexibility and consumer protection.
The BPS judgment highlights where that balance has yet to be fully determined.