Australia’s regulatory body for securities has achieved its first legal victory in court, establishing a new standard for non-cash payment facilities involving cryptocurrency.
The Australian Securities & Investments Commission (ASIC) has made a significant impact on the local crypto market with a recent ruling by the Federal Court against BPS Financial (BPS). The court found that BPS had engaged in unauthorized activities by offering the Qoin Wallet, a payment product that utilized a token called Qoin.
In a recent announcement on May 3, ASIC revealed that the court had determined that BPS did not possess the required financial services license and was not authorized by a licensed entity to issue or provide financial advice regarding the Qoin Wallet.
The ruling also shed light on the fact that BTX, the only crypto exchange that accepted Qoin tokens, was closely connected to BPS and did not allow for the exchange of various alternative cryptocurrencies.
ASIC Chair Joe Longo emphasized the significance of this ruling, as it marks the first legal case against a non-cash payment facility based on cryptocurrency. He further stated that this legal action should serve as a warning to the crypto industry that ASIC will continue to closely monitor their products to protect consumers and ensure compliance with regulatory standards.
Both parties have been directed by the court to collaborate on determining the next steps for additional hearings, which will address unresolved issues including potential penalties. A date for the hearing is expected to be scheduled later in 2024.
In a separate development, ASIC is preparing to challenge the Federal Court’s decision to dismiss a case against Finder Wallet, a subsidiary of Finder.com. The case, filed in December 2022, accused Finder Wallet of offering financial services without possessing an Australian Financial Services license.
For more information, Australia is planning to launch spot Bitcoin ETFs by the end of 2024, according to Bloomberg.