The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court against the owners of crypto asset Qoin, saying its ads were “misleading” or “deceptive.”
ASIC says that ads for crypto-asset token Qoin made consumers believe that the tokens could be exchanged for other crypto-assets or plain old regular money. ASIC says the ads also suggested that Qoin tokens could be used to buy goods and services, that Qoin transactions were regulated in Australia, and that the Qoin facility was compliant with financial services laws.
ASIC Deputy Chair Sarah Court said, “We allege that, despite what BPS represented in its marketing, Qoin merchant numbers have been declining, and that there have been periods of time where it was not possible to exchange Qoin tokens through independent exchanges. ASIC is particularly concerned about the alleged misrepresentation that the Qoin Facility is regulated in Australia, as we believe the more than 79,000 individuals and entities who have been issued with the Qoin Facility may have believed that it was compliant with financial services laws, when ASIC considers it was not.
“Where it falls within our remit, ASIC will take targeted action against unlicensed conduct and misleading promotion of crypto-asset financial products that could harm consumers – this is a key priority for ASIC. Crypto-assets are highly volatile, inherently risky, and complex. Every crypto-asset is different, often making it difficult to compare with each other – or anything else. This makes it crucially important that investors are provided with honest and accurate information.”
BPS Financial, which owns the Qoin crypto asset, is looking to fight the case. Tony Wiese, a director of BPS financial who calls himself the “Governor of the Qoin Reserve,” had this to say:
“BPS does not agree with ASIC’s position and, confident of its position, will be defending the matter.
“Before it started, BPS consulted with ASIC in late 2019 regarding the structure of the Qoin project and did so again in early 2021. BPS will keep the community updated as it is able to.”
No date has been set for the first case management hearing yet.
