An Australian Federal Court has mostly ruled in favour of the country’s markets regulator in a case against BPS Financial Pty Ltd (BPS) regarding the Qoin scheme. The court’s decision acknowledged that the Australian Securities and Investments Commission (ASIC) “succeeded on its Unlicensed Conduct Case, other than in relation to the period during which BPS was an authorised representative of PNI Financial Services Pty Ltd,” which holds a non-cash payments licence. According to ASIC, this authorization lasted for 10 months.
The legal dispute began in 2022 when ASIC filed a lawsuit against BPS. The regulator asked the court to rule the entire Qoin project, including the token, blockchain, and wallet, as a financial product requiring a licence.
ASIC’s efforts to link the Qoin Blockchain and Qoin Wallets as one scheme were partly rejected by the court.
“Contrary to ASIC’s submissions, the Qoin Blockchain, a means of acquiring Qoin and a means whereby business operators who hold Qoin Wallets can register as Qoin Merchants are not components of, and are not themselves, the mechanism which allows the user to make the non-cash payment,” the order said.
Legal experts noted the court’s rejection of ASIC’s attempt to classify an entire blockchain as a “financial product” under Australian law. Blockchain Australia Chair and Digital Assets Lawyer Michael Bacina emphasised that: “This is an important judicial recognition of blockchains as foundational technology where the use of the technology if it breaches the law, can (and should) be prosecuted, but the technology itself stands separate.”
The court directed ASIC and BPS to collaborate on resolving the remaining matters, including penalties, by the end of the month.