- Misleading claims about Qoin approval, liquidity and merchant acceptance were upheld.
- The court imposed monetary penalties, public corrective notices and a long-term ban on operations.
- ASIC has relaxed some crypto licensing requirements while maintaining enforcement pressure.
Australia’s long-running legal battle with BPS Financial has reached 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 A$14 million in penalties for operating its Qoin wallet without the required licence and for making misleading statements about the product.
The case, brought by the Australian Securities and Investments Commission (ASIC), centred on whether BPS had crossed the line from being a technology provider into a financial services provider.
The court found that it had.
By promoting and issuing the Qoin wallet as a non-cash payment solution linked to the digital Qoin token, the court concluded BPS was engaging in regulated conduct without holding an Australian financial services licence, in breach of the Corporations Act.
How Qoin crossed into regulation
Between January 2020 and mid-2023, BPS marketed the Qoin wallet as a way to transact using Qoin tokens across a network of merchants.
The court found this activity went beyond a simple software offering. The product effectively provided a payment service, as well as financial services and advice, all of which require licensing in Australia.
ASIC argued the structure and promotion of the Qoin wallet led consumers to view it as a functional alternative to traditional payment methods.
The court agreed, finding that the absence of a licence during this period placed the product outside the protections of Australia’s consumer finance framework.
Misleading claims under scrutiny
The court also upheld findings that BPS engaged in misleading and deceptive conduct.
Earlier judgments from 2024, affirmed on appeal in 2025, found the company made false or misleading statements about Qoin’s status and functionality.
These included claims that the product was formally approved or registered, that Qoin tokens could be readily exchanged for fiat currencies or other crypto assets, and that the token enjoyed widespread merchant acceptance.
The court determined these representations gave an inaccurate impression of liquidity, acceptance and regulatory standing.
ASIC commenced civil penalty proceedings in 2022 after concluding such claims were likely to influence consumer decisions.
The Federal Court imposed total penalties of A$14 million, including A$1.3 million for unlicensed conduct and A$8 million for misleading representations.
The court also banned BPS from operating a financial services business without a licence for ten years, ordered corrective notices to be posted on the Qoin wallet app and website, and required the company to pay the majority of ASIC’s legal costs.
Justice Downes described the conduct as serious and unlawful, noting involvement by senior management and weak internal compliance systems.
An expanding compliance gap
The BPS decision comes as ASIC adjusts parts of its approach to crypto regulation.
In December the regulator finalised exemptions intended to simplify the distribution of stablecoins and wrapped tokens.
These changes 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 reforms aim to reduce compliance costs for businesses operating in digital asset and payments markets.
In a report published Tuesday titled “Key issues Outlook 2026,” ASIC chair Joe Longo identified digital assets and fintech as areas where regulatory gaps remain.
The report also highlighted risks from opaque private lending, superannuation operational failures, high-risk investment sales and consumer harm linked to AI.
Taken together, these developments show a regulator trying to balance flexibility with consumer protection.
The BPS ruling exposes where that balance has yet to be fully defined.