ASIC wins against BPS Financial in Federal Court appeal
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The news: ASIC has won an appeal against BPS Financial before the Full Federal Court after it appealed part of a favourable ruling secured last year in pursuit of a stricter application of the corporations act.
The context: The Federal Court ruled on 3 May 2024 that BPS Financial had engaged in unlicensed conduct by issuing and providing financial advice about its Qoin Wallet — a digital wallet facilitating cryptocurrency transactions — without an Australian Financial Services Licence.
However, the court initially said there was a period between 5 November 2020 and 30 August 2021 when BPS Financial did not need its own licence because it was an authorised representative of licence-holder PNI Financial Services.
Following an appeal from ASIC, the Full Federal Court has now ruled that BPS was acting on its own behalf — not on behalf of PNI — when issuing Qoin wallet and could not use the 'authorised representative' exemption under the corporations act during that period.
A penalty hearing will be held at a later date.
The proceedings against BPS Financial are a part of a larger set of cases launched by ASIC in late 2022 relating to whether crypto products are financial products and should be regulated as such.
The source: ASIC media release
