Crypto Crackdown: ASIC’s $14m Win Against Qoin Sets New Regulatory Benchmark

The Australian Securities and Investments Commission (ASIC) has secured a landmark win in its regulatory oversight of the crypto sector, with a recent decision[1] in the Federal Court (Court) ordering BPS Financial Pty Ltd (BPS) to pay $14 million in penalties over its promotion and operation of the Qoin Wallet.

The Court found that BPS operated without an Australian Financial Services Licence (AFSL) and made misleading statements about the usability and regulatory status of its Qoin product.

The decision confirms that crypto products can fall within the scope of existing financial services laws and shows that ASIC intends to hold digital asset providers to the same standards as traditional financial services businesses.

This article outlines the key findings of the case, ASIC’s enforcement approach, and what crypto businesses should do to stay compliant in an increasingly regulated environment.

Background: What is Qoin?

Qoin is a digital token launched in 2020 by BPS, a Gold Coast-based company. The token was promoted as a form of digital currency that could be stored in a ‘Qoin Wallet’ and used to purchase goods and services from a growing network of merchants. BPS also claimed that Qoin could be traded for other cryptocurrencies or Australian dollars through exchanges.

By 2021, BPS claimed to have issued over 96,000 Qoin Wallets and to have signed up tens of thousands of merchants. However, concerns were soon raised about the usability and value of Qoin. In 2021, a class action was launched alleging that many listed merchants did not accept Qoin, and that the token had lost significant value. BPS later settled the class action by issuing additional Qoin tokens to affected users.

ASIC’s case against BPS

In October 2022, ASIC commenced civil proceedings against BPS, alleging that it had:

• operated a financial services business without an AFSL, in breach of the Corporations Act;[2] and
• engaged in misleading and deceptive conduct in breach of the law.[3]

The misleading conduct related to representations that:

• Qoin tokens could be exchanged for fiat currency or other crypto-assets;
• the number of Qoin merchants was growing; and
• the Qoin Wallet had been officially approved or registered.

Court findings

In May 2024, the Federal Court found that the Qoin Wallet was a financial product and that BPS had breached certain financial services laws, but accepted that BPS could rely on an ‘authorised representative’ exemption and therefore did not need to hold its own AFSL for a particular 10‑month period.

ASIC successfully appealed the finding that BPS was exempt from licensing, with the Full Federal Court ruling in May 2025 that BPS had acted on its own behalf, and could not rely on an authorised representative exemption.

In summary, the Court found that:

• Qoin Wallet was a financial product in the form of a non-cash payment facility;
• BPS operated without an AFSL for nearly three years, including the disputed 10-month period; and
• BPS engaged in misleading conduct, including overstating Qoin’s usability and falsely implying regulatory approvals had been achieved.

Penalties and orders

In January 2026, significant penalties and injunctive relief were imposed against BPS including:

• $14 million in pecuniary penalties;
• an injunction restraining BPS from carrying on a financial services business in Australia without an AFSL for a 10 year period;
• permanent injunctions restraining BPS from making misleading representations about Qoin;
• adverse publicity notices to be published on the Qoin Wallet app and website; and
• a costs order requiring BPS to pay most of ASIC’s legal costs.

Why this case matters

This is the first time ASIC has secured a court ruling that a crypto-related non-cash payment facility is a ‘financial product’ under the Corporations Act.[4] The decision sets a precedent for how crypto products are regulated under existing law.

Importantly, this case underscores that:

• crypto products can be financial products, depending on their function and structure;
• businesses cannot rely on the authorised representative exemption if they operate independently; and
• ASIC is willing to take enforcement action to clarify the boundaries of regulation and discourage misconduct.

What crypto businesses should do now

ASIC has made it clear that digital asset providers are firmly within its regulatory sights. Businesses (and their advisers) offering crypto products should take proactive steps to ensure compliance, including by taking the following actions:

• seek legal advice to determine whether a product is a ‘financial product’ under the Corporations Act;[5]
• obtain an AFSL or ensure proper authorisation under another licensee’s AFSL;
• review all marketing materials to ensure the material is not misleading or deceptive; and
• refer to ASIC’s Information Sheet 225 (INFO 225)[6] for guidance on digital assets and financial services obligations.

Final word

The Qoin case is a turning point in the regulation of crypto-assets in Australia. It demonstrates that ASIC is willing and able to use existing laws to hold digital asset providers to account. For crypto businesses, the message is clear: compliance is no longer optional.

What are the Cleardocs products available?

Cleardocs offer the following relevant products:

• Superannuation Trust (SMSF)
• Update to SMSF
• SMSF Minutes & Resolutions Package

Please read the Product Benefits, Product Information and Frequently Asked Legal Questions carefully and consider if it is appropriate in your circumstances before purchasing any Cleardocs product.

More information from Maddocks

For more information, contact Maddocks on (03) 9288 0555 and ask to speak to a member of the Commercial team.

More Cleardocs information on related topics

• Investing In Crypto Assets: The Challenge for SMSF Trustees
• SMSFs and cryptocurrency: how NALI is borrowing for Bitcoin?
• Is now the time to update your SMSF deed?

[1] Australian Securities and Investments Commission v BPS Financial Pty Ltd (Penalty) [2026] FCA 18. You can read the full case here.

[2] Corporations Act 2001 (Cth) (Corporations Act) ss 911A(1), s 911A(5B).

[3] Ibid ss 1041H, 1041E and Australian Securities and Investments Commission Act 2001 (Cth) s 12DA.

[4] Corporations Act 2001 (Cth) s 763A.

[5] Ibid s 911A(2).

[6] Digital assets: Financial products and services, Information Sheet 225.