The Federal Court of Australia sanctioned BPS Financial this Monday with a fine of 14 million Australian dollars after determining it operated its Qoin Wallet product without proper authorization. For nearly three years, the firm offered services and provided advice on digital assets without holding a financial services license in Australia, undermining the transparency of the local financial market.
According to the official spokesperson and Chair of the Australian Securities and Investments Commission (ASIC), Joe Longo, this penalty aims to send a strong deterrent message to the entire digital asset industry. The ruling comes after proving that the company made false representations about the token’s acceptance at merchants, exposing thousands of users to significant financial risks due to the total lack of regulatory supervision.
This judicial measure is divided into two parts: 2 million dollars for unlicensed conduct and 12 million for deceptive and harmful behavior toward the general consumer base. Through this decision, authorities seek to cleanse the digital payments ecosystem, ensuring that providers meet protection standards before offering complex financial services to small and medium-sized businesses across the country.
The impact of false liquidity promises and regulatory intervention in Australia
The investigation revealed that BPS Financial marketed the Qoin Wallet as an everyday payment system, claiming tokens could be easily converted into fiat currency or other assets. However, the operational reality showed non-existent liquidity, preventing many users from recovering their initial investment within the firm’s closed blockchain infrastructure. Furthermore, the lack of transparency in its corporate structure concealed BPS’s direct involvement in the project’s management, complicating any attempt at effective oversight.
On the other hand, the court imposed a 10-year restriction prohibiting the company from engaging in any financial activity without first obtaining a formal and legitimate accreditation. In this way, it seeks to prevent recidivism from a company that, according to Justice Downes, acted with objective recklessness involving senior management levels. Consequently, BPS must now publish corrective notices on its digital platforms to warn former and potential clients about these serious legal infractions.
Does this sanction represent a paradigm shift for crypto regulation in 2026?
The 14 million dollar fine marks a milestone in digital asset supervision in Australian territory, setting a more rigorous standard for advertising and operational compliance. In this context, ASIC has identified legal gaps in fintech companies as a priority risk for the year 2026, warning about the use of unauthorized advice and fraudulent marketing practices. Therefore, investors must be cautious and verify the legitimacy of any platform before placing their trust or significant capital.
Additionally, the government continues to advance legislation that could impose multimillion-dollar penalties on exchange platforms that fail to properly safeguard client assets. It is also expected that this case will drive greater accountability in the emerging sector, forcing projects to demonstrate their solvency and actual technical functionality. Finally, the integration of protection frameworks will be key for any cryptocurrency to achieve mass adoption without compromising the patrimonial security of citizens.
