Australia’s full federal court found that the BPS Financial Pty Ltd could not rely on the “authorized representative” exemption under the law on companies in the issuance of “Qoin Wallet”, a non -payment unit on behalf.
The Australian Securities and Exchange and Investment Committee (ASIC) appealed to an aspect of the federal court ruling on May 3, 2024, which found that BPS was exempt from the requirement to hold Australian Financial Services (AFS). SERVICES PTY LTD (PNI) between November 5, 2020 and August 30, 2021.
The full court today found that the BPS was acting on its behalf when issuing the Qoin wallet and not as a PNI representative. Consequently, the full court found that the BPS had to hold AFS license.
The full court declined to examine whether the issuer of a financial product can never act with its own capacity when they act as an authorized representative of an AFS licensee or whether AFS holders must always participate in the issuance of relevant financial products when they are sold or promoted by its authorized representative.
The issue will proceed to a penalty hearing for a date to be set.
BPS has promoted Qoin brands to retail consumers and business owners (called “Qoin Traders”) as a means of paying for goods and services offered by Qoin traders. By September 30, 2022, the Qoin wallet was issued more than 93,000 times and BPS received over $ 40 million from the sale of Qoin brands.