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Australian regulator slams lawsuit on crypto firm

TL;DR

  • Australian regulator slams lawsuit on crypto firm
  • BPS Financials made misleading claims on its website
  • The Australian regulator warns other crypto firms

Australian regulator ASIC has slammed a new lawsuit against a crypto firm operating the Qoin digital asset. According to the announcement, the regulator claimed that the firm had previously made statements about the coin, which turned out to be false. This way, it has misled the crypto market participants and the general public. ASIC claimed that the company told the more than 79,000 traders on its platform that it was compliant with its financial services law which turned out to be a lie.

BPS Financials made misleading claims on its website

The cryptocurrency is a product of BPS Financial, of which Tony Weise and Raj Pathak are co-founders. The co-founders introduced the digital asset to the public in 2020, seeing it achieve little success during the period that it launched. In the statement from the company’s website, the company stated that about 38,000 merchants worldwide are accepting the asset.

The website also claims that its value depends on the number of times traders purchase the token. It also states that another factor determining its value is its trading power on the Block Trade Exchange. The digital asset has done well over the years since it launched, going from $0.16 in 2020 to trade at $6,836 in today’s value.

The Australian regulator warns other crypto firms

The Australian regulator claims that the company was the mastermind behind the BTX exchange and had been doing shady activities underground. The report claimed that it includes imposing restrictions on traders trying to change their Qoin tokens into cash. This meant that the company made false statements when it assured traders that they could swap their tokens for cash at any exchange. The platform also told users that the merchants accepting the token for goods and services had been on the increase, which turned out to be false.

Another lie was the token’s regulatory status in the country. An executive of the Australian regulator claimed that the company confirmed that the number of merchants accepting the token took a sharp decline. In contrast, the company refused to allow users to swap their tokens for cash in other exchanges. ASIC also warned other firms in the country whose activities do not align with the law’s provisions. The executive claimed that digital assets’ volatile and risky nature requires companies to disclose information to traders about certain aspects of the token. BPS has also announced reviewing the allegations as it has refused to concede to the Australian regulator.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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