What the BPS ruling reveals about Australia’s crypto compliance gap

• Misleading claims about Qoin approval, liquidity, and merchant acceptance were upheld.
• The court imposed financial penalties, public notices, and a long-term operating ban.
• ASIC is easing some crypto licensing requirements while maintaining enforcement pressure.

Australia’s long-running court battle against BPS Financial has ended with a decisive ruling that sharpens the spotlight on regulatory gaps in the country’s crypto and digital payments sector.

The Federal Court has ordered BPS Financial Pty Ltd to pay 14 million Australian dollars in penalties for operating its Qoin Wallet without the required licence and for making misleading claims about the product.

The case, brought by the Australian Securities and Investments Commission, centred on whether BPS crossed the line from technology provider to financial services operator.

The court found that it did.

By promoting and issuing the Qoin Wallet as a non-cash payment facility tied to its Qoin digital token, BPS was found to have engaged in regulated conduct without holding an Australian Financial Services Licence, breaching the Corporations Act.

How Qoin crossed into regulation

Between January 2020 and mid-2023, BPS promoted the Qoin Wallet as a way for users to transact using Qoin tokens across a network of merchants.

The court determined that this activity went beyond a simple software product. It involved issuing a payment facility and providing financial services and advice, both of which require licensing in Australia.

ASIC argued that the structure and promotion of the Qoin Wallet meant consumers were encouraged to treat it as a functional alternative to traditional payment methods.

The court agreed, finding that the absence of a licence during this period placed the product outside Australia’s legal framework for consumer protection.

Misleading claims under scrutiny

The court also upheld findings that BPS engaged in misleading and deceptive conduct.

Earlier judgments in 2024, upheld on appeal in 2025, found that the company made false statements about the status and functionality of Qoin.

These included claims that the product was officially approved or registered, that Qoin tokens could be readily exchanged for fiat currency or other crypto-assets, and that the token was widely accepted by merchants.

The court found these representations created an inaccurate impression of liquidity, acceptance, and regulatory standing.

ASIC launched civil penalty proceedings in 2022 after concluding that such claims were likely to influence consumer decisions.

The Federal Court imposed penalties totalling 14 million Australian dollars, including 1.3 million dollars for unlicensed conduct and 8 million dollars for misleading representations.

The court also barred BPS from operating a financial services business without a licence for 10 years, ordered corrective notices to be published on the Qoin Wallet app and website, and required the company to pay most of ASIC’s legal costs.

Judge Downes described the conduct as serious and unlawful, noting the involvement of senior management and weak internal compliance systems.

A widening compliance gap

The BPS decision lands at a time when ASIC is adjusting parts of its crypto regulatory approach.

In December, the regulator finalised exemptions designed to simplify the distribution of stablecoins and wrapped tokens.

These measures allow the use of omnibus accounts with appropriate record-keeping and remove the need for some intermediaries to hold separate Australian Financial Services licences.

The changes aim to reduce compliance costs for firms operating in digital assets and payments.

In a report released on Tuesday titled Key issues outlook 2026, ASIC chair Joe Longo identified digital assets and fintech as areas where regulatory gaps persist.

The report also flagged risks linked to opaque private credit, superannuation operational failures, high-risk investment sales, and AI-related consumer harm.

Together, these developments show a regulator trying to balance flexibility with consumer protection.

The BPS ruling exposes where that balance has yet to be fully defined.