- Misleading claims about approval, liquidity, and merchant acceptance were proven.
- The court imposed financial penalties, public corrective notices, and a long-term ban on operating.
- ASIC eases some crypto licensing requirements while maintaining enforcement pressure.
Australia’s long-running legal battle against BPS Financial has ended with a decisive ruling that highlights regulatory gaps in the country’s crypto and digital payments landscape.
The Federal Court ordered BPS Financial Pty Ltd to pay AUD 14 million in penalties for operating the 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), centered on whether BPS had crossed the line from technology provider to financial services operator.
The court found that it had.
By promoting and issuing the Qoin Wallet as a non-cash payment facility linked to the Qoin digital token, BPS was found to have carried out regulated conduct without holding an Australian financial services licence, in breach of the Corporations Act.
How Qoin became a regulated product
Between January 2020 and mid-2023, BPS promoted the Qoin Wallet as a means for users to transact using Qoin tokens within a network of merchants.
The court determined that this activity went beyond a mere software product. It involved the issuance of a payment facility and the provision of financial services and advice—activities that require licensing in Australia.
ASIC argued that the structure and marketing of the Qoin Wallet encouraged consumers to treat 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 Australia’s legal framework for consumer protection.
Misleading claims under scrutiny
The court also upheld findings that BPS engaged in misleading and deceptive conduct.
Earlier judgments from 2024, upheld on appeal in 2025, found the company made false statements about Qoin’s status and functionality.
These representations 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 enjoyed widespread merchant acceptance.
The court found these statements created a misleading impression about liquidity, acceptance, and regulatory standing.
ASIC commenced civil proceedings with sanctions in 2022 after concluding such claims were likely to influence consumer decisions.
The Federal Court imposed total penalties of AUD 14 million, including AUD 1.3 million for unauthorised conduct and AUD 8 million for misleading representations.
The court also barred BPS from operating a financial services business without a licence for 10 years, ordered corrective notices to be published on the Qoin Wallet app and website, and required the company to pay most of ASIC’s legal costs.
Judge Downes described the conduct as serious and unlawful, noting senior management involvement and weak internal compliance systems.
A widening compliance gap
The BPS decision comes as ASIC adjusts parts of its regulatory approach to crypto assets.
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 recordkeeping 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 Tuesday titled Key Issues Outlook 2026, ASIC Chair Joe Longo identified digital assets and fintech as areas with persistent regulatory gaps.
The report also flagged risks from opaque private credit, retirement system operational failures, high-risk investment sales, and consumer harms related to AI.
Taken together, these developments show a regulator attempting to balance flexibility with consumer protection.
The BPS decision exposes where that balance has yet to be fully defined.