SUPERNEWS

Crypto

Australian Court Rules on Qoin, Differentiates Blockchain Tech

Australian Court rules BPS engaged in unlicensed conduct, offering nuanced recognition of blockchain technology's regulatory status.

By Mackenzie Crow

ᐧ

5/6, 08:47 EDT
Bitcoin / U.S. dollar
article-main-img

Key Takeaway

  • Australian Federal Court sides with ASIC against BPS Financial over unlicensed Qoin scheme, except for a 10-month period under PNI Financial's license.
  • Court rejects ASIC's claim that Qoin Blockchain and Wallets are a single financial product, marking a significant judicial stance on blockchain technology.
  • Case outcome prompts discussions on penalties and underscores the nuanced legal view of blockchain as separate from its use in financial products.

Regulatory Spotlight on Qoin

The Australian Federal Court has delivered a mixed verdict in the case brought by the Australian Securities and Investments Commission (ASIC) against BPS Financial Pty Ltd (BPS) concerning its Qoin scheme. The court found that BPS engaged in unlicensed conduct, except for a 10-month period when BPS was an authorized representative of PNI Financial Services Pty Ltd, which holds a non-cash payments license. This ruling underscores ASIC's ongoing efforts to tighten regulatory oversight over the crypto market in Australia.

The Qoin Controversy

ASIC's lawsuit against BPS aimed to classify the Qoin project—including its token, blockchain, and wallet—as a financial product requiring a license. This case highlights the regulatory challenges facing the crypto industry, as authorities seek to apply traditional financial regulations to digital assets. However, the court's decision to not consider the Qoin Blockchain and Qoin Wallets as part of a single financial product scheme marks a significant departure from ASIC's stance.

Judicial Recognition of Blockchain

The court's ruling offered a nuanced view of blockchain technology, distinguishing between the use of the technology and the technology itself. Michael Bacina, Chair of Blockchain Australia and a Digital Assets Lawyer, hailed the decision as an "important judicial recognition of blockchains as foundational technology." This distinction suggests that while specific uses of blockchain may fall under regulatory scrutiny, the underlying technology remains separate and should not be indiscriminately classified as a financial product.

Management Quotes

  • Michael Bacina, Blockchain Australia Chair and Digital Assets Lawyer:

    "This is an important judicial recognition of blockchains as foundational technology where the use of the technology if it breaches the law, can (and should) be prosecuted, but the technology itself stands separate."