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Australian Court Gives Victory to Market Regulator in Case Against Qoin Blockchain, But There’s a Problem
An Australian federal court on Friday ruled mostly in favor of the Australian markets regulator in its case against BPS Financial Pty Ltd (BPS) over its Qoin program. judicial documents and the regulator announcement show.
Justice J Downes ruled that the Australian Securities and Investments Commission (ASIC) “was successful in its case of unlicensed conduct, except in relation to the period during which BPS was an authorized representative of PNI Financial Services Pty Ltd”, which holds a non-cash payment license. That period lasted 10 months, ASIC said.
In 2022, ASIC sued BPSasking the court to declare that the entire Qoin project, token, blockchain and wallet, was a financial product requiring a license.
In Australia, ASIC has seen both victories AND losses as it intensifies regulatory scrutiny through legal proceedings.
Part of this case was ASIC’s claim that Qoin Blockchain and Qoin Wallet constituted a single scheme, but the court disagreed.
“Contrary to ASIC’s submissions, the Qoin Blockchain, a means of acquiring Qoin and a means by which traders holding Qoin wallets can register as Qoin traders are not components, and are not themselves, of the mechanism that enables the user to make the non-cash payment”, reads the order.
Experts said the court had importantly rejected ASIC’s attempts to have an entire blockchain be considered part of a “financial product” under Australian law.
“This is an important judicial recognition of blockchains as a foundational technology where use of the technology, if it violates the law, can (and should) be prosecuted, but the technology itself remains separate,” said Michael Bacina, president and attorney specializing in Blockchain Australia digital assets. .
The order asked ASIC and the BPS to confer and agree a form of order that would resolve the remaining issues, including sanctions, by the end of this month.