ASIC Hits BPS Financial with A$14M Penalty Over Misleading Qoin Wallet Crypto Product – Full Analysis

In a landmark regulatory enforcement action that has sent shockwaves through Australia’s digital asset sector, the Australian Securities and Investments Commission (ASIC) has secured a Federal Court judgment imposing A$14 million in penalties on BPS Financial Pty Ltd for its conduct surrounding the Qoin Wallet - a crypto-linked payment product marketed aggressively to retail users without proper licensing or accurate disclosures.

This ruling underscores a growing global trend: regulators are cracking down on crypto-related products that cross into regulated financial services without compliance, and are harshly penalizing firms that mislead consumers about risks, licensing, or product features. 

What Is the Qoin Wallet and Who Is BPS Financial?

The Qoin Wallet was launched by BPS Financial Pty Ltd as a digital wallet and non-cash payment facility tied to a crypto token called Qoin. The product was promoted in marketing materials and public communications as a tool that could store, transact, and expand the utility of Qoin tokens, including claims of merchant acceptance and exchangeability for fiat or other digital assets.

However, ASIC’s enforcement action found serious problems with both how the product was presented and the company’s legal basis for offering it.

Federal Court Findings: Unlicensed Conduct and Misleading Representations

After years of litigation, the Federal Court of Australia ruled that:

• BPS Financial operated without an Australian Financial Services License (AFSL) while issuing the Qoin Wallet and providing financial advice to users - a direct contravention of the Corporations Act 2001 (Cth).
• The company made false and misleading statements about the nature, approvals, utility, and regulatory status of the Qoin Wallet and its associated token.

In 2024, the initial Federal Court judgment found unlicensed conduct over almost three years. ASIC then appealed part of the case that had initially accepted an “authorised representative” exemption. In 2025, the Full Federal Court held that BPS could not rely on that exemption, meaning the unlicensed conduct extended for an additional 10-month period. 

Breaking Down the A$14 Million in Penalties

The Federal Court ordered a total penalty of A$14 million, structured as:

• A$2 million for unlicensed conduct; and
• A$12 million for misleading and deceptive conduct.

Some international outlets report this figure as approximately US$9.3 million based on current exchange rates - but regardless of currency depiction, the underlying ruling is the same: ASIC has secured one of the largest penalties in an Australian crypto-related enforcement action to date.

Court-Ordered Restrictions and Requirements

In addition to financial penalties, the Federal Court also imposed several binding restrictions and obligations on BPS Financial, including:

• Permanent restraints from making any false or misleading representations about the number of Qoin Wallet users, the ability to exchange Qoin tokens for fiat or other crypto assets, and claims that the wallet was “officially approved or registered.”
• A 10-year restriction against carrying on any financial services business without holding an AFSL.
• Mandatory publication of an adverse publicity notice both within the Qoin Wallet application and on associated websites.
• Coverage of ASIC’s legal costs in the proceeding.

These outcomes demonstrate a significant regulatory reprimand designed not only to punish past conduct but also to stop future harms and alert the broader crypto ecosystem to compliance expectations.

ASIC’s Regulatory Message to the Crypto Industry

In its statement accompanying the ruling, ASIC Chair Joe Longo emphasized:

“The size of these penalties underscores the seriousness of BPS Financial’s misconduct and is intended to send a strong message of deterrence… Given the nature of these products, providers must have the appropriate licences and authorisations, and investors must be able to make decisions based on clear and correct statements…”

The statement reflects a regulatory environment where digital assets are no longer treated as an ambiguous frontier but as financial services with real world consumer protection obligations.

ASIC also reiterated that the risks of cryptocurrencies and related products are high and that consumers should exercise extreme caution. The regulator pointed users to its Moneysmart website for guidance on crypto risks.

Why This Case Matters for Crypto Companies and Investors

This ruling has several implications for the broader crypto ecosystem:

1. Crypto Products Can Trigger Financial Regulation: Many token-linked products may appear “decentralized” or simply “digital,” but if they offer financial services - such as payment facilities, wallet services, or investment advice - they fall squarely under financial laws. ASIC now clearly enforces those laws.

2. Misleading Marketing Has Real Consequences: Statements about regulatory approval, exchangeability, or merchant adoption must be truthful, substantiated, and compliant. Overstating adoption metrics or implying official endorsements can lead to major penalties.

3. Regulatory Enforcement Is Growing Faster Than Legislation: Like many other jurisdictions, Australia currently regulates crypto through existing financial laws, meaning gray areas are often litigated in court. ASIC’s success in appeal demonstrates that courts are willing to interpret the rules strictly.

Global Context: Crypto Regulation on the Rise

ASIC’s action against BPS Financial is part of a wider global trend where regulators are:

• Clarifying how crypto intersects with financial services laws.
• Raising licensing and conduct standards for crypto intermediaries.
• Taking enforcement actions against firms that operate outside legal boundaries.

Leading jurisdictions including the U.S., EU, UK, Singapore, and Hong Kong have all signaled stronger enforcement and rule-making around digital assets. This broader trend reflects a shift from “wait and see” to active oversight.

For any crypto firm offering services that touch payments, advice, custody, or investment returns - understanding and complying with local financial regulation is no longer optional.

Conclusion: What the ASIC Ruling Signals for the Crypto Industry

The Federal Court ruling against BPS Financial marks a significant moment in Australia’s approach to crypto-related regulation.

The case highlights how crypto-linked products can fall within the scope of existing financial services laws, particularly when they involve payment facilities, wallets, or representations about usability and adoption. It also demonstrates the scale of penalties Australian courts are prepared to impose where unlicensed activity and misleading conduct are established.

For investors and market observers, the Qoin Wallet case underscores the importance of regulatory scrutiny in an industry that has often operated ahead of clear legal boundaries. The decision reinforces ASIC’s position that crypto products are not exempt from consumer protection standards simply because they are built on digital assets.

As digital assets continue to intersect with traditional financial systems, enforcement actions such as this are likely to play a central role in shaping how crypto markets evolve - in Australia and internationally.