The Australian Securities & Investment Commission (ASIC) has secured a legal victory against BPS Financial, the company behind the Qoin cryptocurrency. The Federal Court of Australia found that BPS made four false claims regarding its non-cash payment facility, which is powered by the Qoin token.

Specifically, the court ruled that BPS violated the Corporations Act and the Australian Securities and Investments Commission Act by making the following false statements:

Claiming that Qoin was registered or approved by the government.
Claiming that Qoin was legally compliant.
Claiming that Qoin was freely exchangeable for other cryptocurrencies or fiat currencies.
Claiming that Qoin was accepted by a growing network of merchants.

The court has ordered both sides to confer on the next steps before another hearing later this year, during which potential penalties may be discussed.

BPS Financial launched Qoin in January 2020. According to the company's website, the Qoin ecosystem consists of its token, blockchain, wallet, and a "payment facility." The website claims that Qoin has more than 100,000 users and 36,000 registered merchants, with 394 million Qoin tokens in circulation as of June 2021.

In addition to the case brought by ASIC, BPS Financial is also facing a class-action lawsuit filed against it in November 2021. The lawsuit alleges deception, non-compliance with regulations, and operating as a pyramid scheme. This case appears to remain open.

Furthermore, Qoin was expelled from the Blockchain Australia industry association in February 2021, further highlighting the concerns surrounding the project's operations.

ASIC initiated its legal action against BPS Financial in October 2022. According to the regulator, the court's decision in its favor marks the first ruling against a non-cash payment facility involving cryptocurrencies. ASIC Chair Joe Longo stated:

"ASIC has taken a number of enforcement actions against crypto asset businesses with the intention of clarifying what is a regulated product and when the provider needs a license."

Related: Swyftx to chop its 'Earn' program this week, citing murky regulations

In recent months, ASIC has been actively pursuing legal actions against various entities in the cryptocurrency space. In December 2022, ASIC sued the financial product comparison website Finder.com for offering an unlicensed cryptocurrency yield-bearing product. However, the court ruled against ASIC in March, and the regulator is currently appealing that decision.

ASIC's actions demonstrate its commitment to regulating the cryptocurrency industry and ensuring compliance with Australian laws and regulations. As the adoption of digital assets continues to grow, regulatory bodies are expected to maintain a vigilant stance to protect consumers and promote transparency within the ecosystem.