Federal Court imposes A$14 million penalty on BPS Financial and bars unlicensed crypto operations for a decade

The Federal Court has delivered a decisive enforcement outcome in a case that tests regulatory reach over crypto-linked payment products. Regulators argued that BPS Financial marketed and ran its Qoin Wallet in ways that required formal financial services authorisation; the court agreed and imposed a six-figure-plus multimillion penalty. The judgment finds misconduct spanning multiple years and implicates senior management alongside weak compliance systems, producing both fines and behavioural restraints. Financial penalties were apportioned to reflect distinct breaches, including unlicensed activity and misleading statements about the wallet’s convertibility and merchant acceptance. Beyond monetary sanctions, the court imposed a decade-long restriction preventing the business from offering financial services without a licence and compelled public notices on its app and website to correct consumer-facing claims. This ruling arrives as ASIC is simultaneously easing some rules for stablecoins and wrapped tokens, a parallel development that underscores the regulator’s twin priorities: managing innovation while enforcing baseline consumer protections. For industry participants, the case clarifies that regulatory relief for certain tokenised products does not licence firms to sidestep authorisation or mislead customers. Market players should view the judgment as a practical enforcement playbook—expect scrutiny of product descriptions, claims about fiat convertibility, and the robustness of compliance controls. For consumers, the outcome reduces asymmetric information around high‑risk digital payment offerings and creates remediation pathways where statements were false or exaggerated. The decision will likely influence counsel advice, investor due diligence and compliance investments across local crypto firms and fintechs that straddle payments and securities rules. In the short term, BPS faces direct financial strain and reputational damage; in the longer term, the industry will see clearer boundaries around permissible product promotion and the consequences of overstating utility. The court’s approach balances deterrence through penalties with corrective measures intended to restore truthful disclosure and prevent recurrence. That combination sends a clear signal: innovation will be tolerated, but not when it masks regulated activity or misleads retail participants.