Federal Court slaps $14m penalty on company behind crypto product Qoin

• ss 911A(1) and 911A(5B) of the Corporations Act 2001, except in the period from 5 November 2020 to 30 August 2021 
• ss 12DA(1) and 12DB(1) of the Australian Securities and Investments Commission Act 2001, in connection with its trade representation, merchant growth representation, and approval/registration representation 

The Australian Securities and Investments Commission (ASIC) appealed this judgment. It alleged that BPS engaged in unlicensed conduct over the excluded 10-month period, in contravention of ss 911A(1) and 911A(5B), as it could not rely on the authorised representative exemption under the Corporations Act. 

On 30 May 2025, the Federal Court’s Full Court allowed ASIC’s appeal. In total, the Federal Court issued seven declarations of contravention against BPS. The Federal Court then addressed the appropriate quantum of the civil penalty. 

$14m penalty set

The total penalties imposed by the Federal Court of Australia comprised $2m for unlicensed conduct and $12m for misleading and deceptive conduct involving false and misleading statements. Apart from the pecuniary penalties, the court also: 

• permanently restrained BPS from making false or misleading representations regarding the Qoin Wallet’s official approval and registration, the number of Qoin Wallet holders, and Qoin tokens’ exchangeability for fiat or other crypto assets 
• imposed on BPS a 10-year restriction from operating a financial services business without an Australian financial services licence 
• ordered BPS to publish an adverse publicity notice on the Qoin Wallet application and ask the publisher of the relevant website to post the same notice 
• made BPS pay most of ASIC’s costs for the proceeding 

The Federal Court found it appropriate to slightly discount the costs order in ASIC’s favour and exclude the appeal costs. 

ASIC’s response

“The size of these penalties underscores the seriousness of BPS Financial’s misconduct and is intended to send a strong message of deterrence to the digital asset industry,” said Joe Longo, ASIC chair, in a media release. 

Due to the volatility, risk, and complexity associated with crypto products, he emphasised that providers should have the proper licenses and authorisations, while investors should base their decisions on precise and accurate statements. 

Longo shared that ASIC would keep focusing on the digital asset industry and taking steps to address investors’ potential exposure to unlicensed financial advice, misleading and deceptive conduct, and risky products. 

In its media release, ASIC urged consumers to exercise caution when dealing with claims about crypto assets and crypto‑related products.