Australian Federal Court Slaps $9.7M Penalty on BPS Financial Over Unlicensed Qoin Crypto Wallet

Key Takeaways

• Significant Penalties for Crypto Misconduct: The Federal Court ordered BPS Financial to pay $9.7 million USD (AUD 14 million) for unlicensed conduct and misleading representations linked to its Qoin Wallet crypto product.
• Licensing Failures at the Core: The Court found BPS operated and promoted the Qoin Wallet for years without holding an Australian Financial Services Licence, including during a period where it improperly relied on an “authorised representative” exemption.
• Misleading Claims Drove Higher Fines: The bulk of the penalty stemmed from false and misleading statements about the Qoin Wallet, including claims about adoption, token convertibility, and regulatory approval.
• Long-Term Restrictions Imposed: BPS has been barred for 10 years from operating a financial services business without a licence and permanently restrained from making specific misleading claims.
• Clear Signal to the Crypto Sector: Australian Securities and Investments Commission said the ruling sends a strong deterrent message as digital asset products remain a priority enforcement focus.

Deep Dive

An Australian federal court has ordered BPS Financial to pay $9.7 million USD (AUD 14 million) in penalties over its promotion and operation of the Qoin Wallet, a crypto-based payment product that regulators said was sold without the required licenses and backed by misleading claims.

The ruling follows years of court proceedings that found BPS Financial engaged in unlicensed financial services activity while promoting Qoin Wallet as a non-cash payment facility tied to a digital token known as Qoin. The Court also concluded the company made false and misleading representations about how the product worked and how widely it was used.

In earlier findings handed down in 2024, the Federal Court determined that BPS Financial issued and provided financial advice about the Qoin Wallet for nearly three years without holding an Australian Financial Services Licence. The Court found the conduct breached financial services laws and misled users about key aspects of the product.

That liability widened in 2025, when the Full Federal Court rejected BPS Financial’s attempt to rely on an “authorised representative” exemption under the Corporations Act. The decision extended the period of unlicensed conduct by an additional 10 months.

On 27 January 2026, the Court imposed penalties totalling $9.7 million USD (AUD 14 million), broken down as:

• $1.38 million USD (AUD 2 million) for unlicensed conduct
• $8.31 million USD (AUD 12 million) for misleading and deceptive conduct related to false statements about the Qoin Wallet

Australian Securities and Investments Commission Chair Joe Longo said the size of the penalties reflected the seriousness of the misconduct and were intended to send a clear warning to the digital asset sector.

“The size of these penalties underscores the seriousness of BPS Financial’s misconduct and is intended to send a strong message of deterrence to the digital asset industry,” Longo said. He added that crypto products remain complex and high-risk, making licensing and accurate disclosure essential for investor decision-making.

Justice Downes, delivering the judgment, said BPS Financial engaged in “serious and unlawful misconduct” from January 2020 through mid-2023. She noted that while mitigating factors were taken into account, the penalties reflected the objective recklessness of the conduct, the involvement of senior management, the nature of the misleading statements, and the company’s inadequate compliance systems.

Beyond the financial penalties, the Court imposed a series of restrictions designed to prevent further misconduct.

BPS Financial has been permanently restrained from making false or misleading statements about the number of Qoin Wallet holders, the ability to exchange Qoin tokens for fiat currency or other crypto-assets, or any claim that the product was officially approved or registered. The company has also been barred for 10 years from carrying on a financial services business without an Australian Financial Services License.

In addition, BPS must publish an adverse publicity notice within the Qoin Wallet application and take steps to have a similar notice published on the qoin.com website. The Court also ordered the company to pay most of the legal costs incurred by ASIC during the proceedings.

The decision adds to a growing body of enforcement action signaling that Australia’s regulators expect crypto and digital asset providers to comply with existing financial services laws, regardless of how new or innovative the product may be.

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