Australian Federal Court Rules Mostly in Favor of Regulator in Case Against BPS Financial

Australian Federal Court Ruling on BPS Financial Pty Ltd Case

The Australian Federal Court recently delivered a significant ruling in favor of Australia’s markets regulator, the Australian Securities and Investments Commission (ASIC), in its case against BPS Financial Pty Ltd (BPS) regarding its Qoin scheme.

ASIC’s Success in Unlicensed Conduct Case

Judge J Downes concluded that ASIC succeeded in its Unlicensed Conduct Case against BPS, as per court documents. The ruling, however, excluded the period when BPS operated as an authorized representative of PNI Financial Services Pty Ltd, which holds a non-cash payments license.

Background of the Legal Dispute

The legal dispute between ASIC and BPS dates back to 2022 when ASIC initiated a lawsuit, arguing that the Qoin project, including the token, blockchain, and wallet, required a license. The court order clarified that certain components of the Qoin scheme were not deemed as enabling non-cash payments.

Significance of the Court’s Decision

Legal experts have emphasized the importance of the court’s rejection of classifying an entire blockchain as a financial product under Australian law. This acknowledgment distinguishes blockchains as foundational technology separate from their legal implications.

Next Steps and Regulatory Environment

Following the ruling, ASIC and BPS are set to discuss remaining issues and penalties. Meanwhile, the crypto industry in Australia has faced increased scrutiny, with regulatory actions against exchanges, directives for banks to report crypto exposures, and proposals for stricter regulations on digital asset platforms.

Industry Response and Initiatives

In response to the regulatory landscape, industry bodies like Blockchain Australia have launched initiatives to address challenges such as crypto scams and frauds, aiming to promote a safer environment for crypto transactions in Australia.