Australia court sets precedent for crypto in non-cash payments

Australia’s securities regulator has scored its first court victory, setting a precedent for a non-cash payment facility involving crypto.

The Australian Securities and Investments Commission (ASIC) has set a legal precedent in the local crypto market after the Federal Court found that BPS Financial (BPS) engaged in unlicensed conduct when offering its token-using non-cash payment product, Qoin Wallet. I called Qoin.

In a press release on May 3, ASIC said the court found that BPS did not hold the required financial services licence, and was “not authorized by the licensee to give or provide financial advice on the Qoin Wallet”.

“Judge Downes also found that BPS had engaged in misleading or deceptive conduct and made false or misleading statements regarding the Qoin Wallet.”

ASIC

In the decision, it was emphasized that BTX, the only crypto exchange that accepts Qoin tokens, is not independent from BPS and does not allow the exchange of various altcoins.

ASIC Chairman Joe Longo underlined the importance of the decision, marking the first case filed against a crypto-based non-cash payment facility. He also added that the transactions “should send a message to the crypto industry that their products will continue to be reviewed by ASIC to ensure consumers are protected and they comply with regulatory obligations.”

The court ordered both parties to work together to determine next steps for future hearings where remaining issues, including penalties, will be considered. The trial date will be set in late 2024.

In another development, ASIC is seeking to appeal the Federal Court’s decision to dismiss the regulator’s case against Finder Wallet, a subsidiary of Finder.com. The lawsuit, launched in December 2022, accused Finder Wallet of providing financial services without holding an Australian Financial Services licence.