The Australian Securities and Investment Commission (ASIC) is suing the Gold Coast-based digital currency Qoin. In court documents, the financial watchdog alleges that the crypto platform made either “false” or “misleading” representations when it marketed itself to roughly 80,000 traders.
ASIC Is Eying Qoin
Among the company’s statements that ASIC claims are untrue was one that Qoin could be traded for several other cryptocurrencies or for the Australian dollar via independent exchanges. ASIC also says Qoin told investors the asset could be utilized for normal, everyday purchases of goods and services, and that multiple industries and businesses around the globe had already incorporated measures to accept Qoin as a method of payment.
Qoin is owned by a firm called BPS Financial Limited. In a recent statement, Tony Wiese – the director of the firm – said ASIC is incorrect in its judgements and that he, along with all the other executives of the company, have every intention of defending themselves and their enterprise. He said:
BPS does not agree with the position of ASIC and will be defending the matter. Our focus remains to develop the Qoin project technology and ecosystem.
By contrast, ASIC is insistent that the firm misrepresented itself to investors everywhere, and representatives appear hellbent on making sure those at the head of the Qoin table pay the required price. ASIC deputy chair Sarah Court mentioned in a statement:
We allege that, despite what BPS represented in its marketing, Qoin merchant numbers have been declining, and that there have been periods of time where it was not possible to exchange Qoin tokens through independent exchanges. ASIC is particularly concerned about the alleged misrepresentation that the Qoin facility is regulated in Australia, as we believe the more than 79,000 individuals and entities who have been issued with the Qoin facility may have believed that it was compliant with financial services laws when ASIC considers it was not.
The Qoin website says the company is presently working with about 38,000 merchants. In other words, 38,000 businesses are accepting the Qoin asset as a method of payment, but Court says this isn’t true either. She mentioned:
We allege that when investors purchased these Qoin tokens, the areas or the stores and merchants which they could use them in were actually decreasing.
A First in the Australian Crypto Scene
Continuing the discussion, Court says this is the first time ASIC had taken such measures against a cryptocurrency company, and that if the agency wins its case, the company could find itself paying millions of dollars in fines. She said:
The whole area of crypto, whether or not crypto assets are financial products, is a relatively new area. We think when you look at all this together, this really is a financial product, and that investors should have the appropriate protections that are offered under corporation laws.