Australian Federal Court Rules in Favor of ASIC in BPS Financial Pty Ltd Case Over Qoin Scheme

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

Judge J Downes mostly ruled in favor of ASIC, stating that the regulator had succeeded in its Unlicensed Conduct Case against BPS, except for the period when BPS was an authorized representative of PNI Financial Services Pty Ltd. This period, which lasted for 10 months, was the only exception where ASIC did not prevail.

The case, which began in 2022, saw ASIC alleging that the entire Qoin project, including the token, blockchain, and wallet, constituted a financial product that required a license. While the court agreed with ASIC on many points, it disagreed on the assertion that the Qoin Blockchain and Qoin Wallets were part of a single scheme.

Experts have hailed the court’s decision as an important rejection of ASIC’s attempts to classify an entire blockchain as a financial product under Australian law. Blockchain Australia Chair and Digital Assets Lawyer Michael Bacina noted that the ruling recognized blockchains as foundational technology that should be prosecuted if used unlawfully, but the technology itself should be considered separate.

The court has instructed ASIC and BPS to come to an agreement on the remaining questions, including penalties, by the end of the month. This ruling marks a significant development in Australia’s regulatory oversight efforts and sets a precedent for future cases involving blockchain technology and financial products.