Australian regulator secures $9.7 million penalty against BPS Financial over Qoin Wallet violations

Australia’s Federal Court has imposed a $14 million AUD ($9.7 million) penalty on BPS Financial Pty Ltd for operating its Qoin Wallet scheme without a license and misleading consumers.

The penalty, announced by the Australian Securities and Investments Commission on Tuesday, consists of $2 million AUD ($1.4 million) for unlicensed conduct and $12 million AUD ($8.3 million) for deceptive representations.

According to Justice Wendy Downes’ judgment summary, the misconduct ran from January 2020 to mid-2023, during which BPS issued more than 96,000 Qoin Wallets and generated over $42 million AUD ($29.2 million) in revenue from Qoin token sales.

The Federal Court first established unlicensed and misleading conduct in a 2024 decision, with the Full Federal Court in 2025 extending the unlicensed period by a further 10 months after finding BPS could not rely on an authorized representative exemption under the Corporations Act.

Justice Downes stated the $2 million AUD penalty for unlicensed conduct was set for deterrence. She said the $12 million AUD penalty for misleading representations accounted for the “objective recklessness of the conduct, involvement of senior management,” and BPS’s inadequate compliance.

ASIC Chair Joe Longo said the penalty underscores the seriousness of the misconduct. “The digital asset industry is well on notice that its products will continue to be a focus for ASIC. We want to encourage innovation and new services for consumers, but not at their expense,” Longo noted in the statement.

The court also issued several injunctions alongside the monetary penalty. BPS is permanently restrained from making false or misleading statements regarding Qoin Wallet holder numbers, token exchangeability, or its regulatory approval status.

Justice Downes said the company is prohibited from carrying on a financial services business without a license for 10 years and directed it to publish an adverse publicity notice on the Qoin Wallet application. BPS was also ordered to pay most of ASIC’s costs for the proceeding.

ASIC tightens focus on regulatory perimeter

The enforcement action coincides with a renewed warning from Longo on regulatory boundaries. In a separate statement on Tuesday, he said rapid innovation, particularly in digital assets, continues to create risks, including unlicensed advice and misleading conduct.

Longo stated that while the government must decide if new products require licensing, some entities actively seek to remain outside regulation. He said ensuring clarity on licensing and maintaining perimeter oversight are priorities for ASIC in 2026.

These developments follow Australia’s move to formally incorporate crypto platforms into its financial licensing regime. In November, the Treasury proposed legislation to parliament requiring digital asset platforms to obtain an Australian Financial Services Licence.

The bill would impose standard financial service obligations, including acting honestly and fairly, providing clear disclosures, and maintaining risk controls. This builds on updated guidance published by ASIC last October, which classified products like stablecoins and wrapped tokens as financial products, necessitating a license for providers.