Australian Securities and Investments Commission v BPS Financial Pty Ltd (Penalty) [2026] FCA 18

This judgment is the penalty stage of ASIC's case against BPS Financial Pty Ltd about the Qoin Wallet and Qoin Tokens. The Court was not starting from scratch. Earlier decisions had already established liability. The 2024 liability judgment found contraventions, and the 2025 Full Court appeal expanded the period of unlicensed conduct by overturning BPS's success for one part of the timeline. By January 2026, the Federal Court was deciding what relief should follow.

The commercial story matters. BPS developed the Qoin project in 2019 and launched a wallet-based payment system using Qoin Tokens. The Court said the Qoin Wallet was a non-cash payment facility. BPS promoted the product through its website and a White Paper. It also tried to put in place a compliance structure before and after launch, including legal advice from HWL Ebsworth, discussions with ASIC, arrangements with Billzy and later PNI, and an AFSL application lodged in October 2020.

Despite those steps, the Court's synopsis was blunt. It said that from January 2020 until mid-2023 BPS engaged in serious and unlawful misconduct. During that period, without holding an AFSL, BPS carried on a financial services business by issuing the Qoin Wallet and providing financial product advice in relation to it. The Court also said BPS published false and misleading representations about exchangeability, merchant growth, and the approval or registration status of the Qoin Wallet.

The scale of the business activity was significant. The judgment records that BPS issued more than 96,000 Qoin Wallets and derived over $42 million in revenue from the sale of Qoin Tokens. That scale was part of the context for penalty.

The adverse publicity notice attached to the orders is especially useful because it sets out the periods of contravention in a structured way.

For the licensing findings, the Court declared in 2024 that BPS carried on a financial services business without an AFSL between 30 January 2020 and 4 November 2020, and again between 1 September 2021 and 19 October 2023. ASIC then appealed in relation to the gap period. On 30 May 2025, the Full Court declared that BPS had also carried on that financial services business without an AFSL between 5 November 2020 and 30 August 2021. Taken together, those declarations meant BPS was found to have carried on a financial services business without an AFSL continuously from 30 January 2020 to 19 October 2023.

The Court said that business involved two things. First, dealing in a financial product, being the Qoin Wallet. Second, providing financial product advice by publishing on the Qoin website and in promotional material accessible to the public statements of opinion intended to influence people in making a decision about the Qoin Wallet.

The misleading representation findings were also tied to specific periods. The Fiat Trade Representation ran from 30 January 2020 to 21 November 2021. The Court said it was false or misleading because throughout that period it was not possible to exchange Qoin for fiat currency on any independent exchange, and to the extent the statement was about a future matter, BPS did not have reasonable grounds for making it.

The Crypto Trade Representation ran from 30 January 2020 to 20 July 2023. The Court said it was false or misleading because throughout that period it was not possible to exchange Qoin for other crypto-assets on any independent exchange, and again BPS lacked reasonable grounds to the extent the statement was about a future matter.

The Merchant Growth Representation ran from 8 October 2021 to 24 October 2022. The Court said it was false and misleading because the number of Qoin merchants was in an overall and persistent state of decline from 8 October 2021.

The Approval or Registration Representation ran from 30 January 2020 to 24 October 2022. The Court said it was false and misleading because the Qoin Wallet was not a product that had been officially approved or officially registered.

By the time of this judgment, the main liability questions had already been answered. The central issue left for Justice Downes was relief. The judgment identifies three sub-issues. First, whether BPS should be relieved from liability for the unlicensed conduct under section 1317S of the Corporations Act. Second, if not, what penalty should be imposed for the unlicensed conduct. Third, what penalty should be imposed for the misleading conduct.

The parties were far apart. ASIC sought total pecuniary penalties of $21 million. BPS argued it should be relieved from liability for the unlicensed conduct, or alternatively that no penalty should be imposed for that conduct, and that total penalties should be only $600,000.

The section 1317S issue was important because it required the Court to consider whether BPS had acted honestly and whether, having regard to all the circumstances, it ought fairly to be excused. The judgment explains that this involves a staged inquiry. The Court had to be positively satisfied that BPS acted honestly, then decide whether BPS ought fairly to be excused, and then decide whether relief should be granted wholly or partly.

The Court accepted that BPS acted honestly. The judgment says there was no evidence of deceit or conscious impropriety, no intent to gain an improper benefit or advantage, and that in light of the legal advice obtained and BPS's engagement with ASIC, it could not be said BPS acted carelessly or imprudently to such a degree as to show no genuine attempt to comply with section 911A.

That did not end the matter. Honesty was only the first step. The Court still had to decide whether BPS ought fairly to be excused and, if not, what penalty and other orders were appropriate in light of the seriousness, duration and scale of the conduct.

Justice Downes refused to relieve BPS from liability to pay a pecuniary penalty for the unlicensed conduct. The Court therefore rejected BPS's attempt to avoid penalty under section 1317S, even though it accepted BPS had acted honestly.

The Court determined that the appropriate total pecuniary penalty was $14 million. The judgment also says the Court ordered relief in the form of injunctions and corrective advertising substantially in the terms proposed by the parties, with a slight discount on the costs order in favour of ASIC and with appeal costs excluded.

The injunctions were structured and practical. First, BPS was permanently restrained from contravening section 12DB of the ASIC Act by making false or misleading written representations concerning the number of Qoin Wallet holders, including those willing to accept payment via Qoin, the ability of Qoin Tokens to be exchanged for fiat or other crypto-assets using the Qoin Wallet, and claims that the Qoin Wallet had been officially approved or officially registered.

Second, BPS was restrained for 10 years from carrying on a financial services business in Australia without holding an AFSL, except as permitted by the Corporations Act.

The Court also made adverse publicity orders. Within 14 days of the penalty order being made, BPS had to request publication of a notice on the Qoin website through a prominent click-through banner and ensure the notice remained available for at least 90 days. BPS also had to publish, or cause to be published, the same notice in the Qoin Wallet app through a pop-up message and link for at least 90 days. The notice itself summarised the declarations, the periods of contravention, the misleading representations, the $14 million penalty and the restraints imposed.

On costs, BPS was ordered to pay 90 per cent of ASIC's costs up to and including 3 May 2024, and ASIC's costs after that date, excluding appeal costs, with a set-off for certain costs thrown away under earlier orders.

The orders also contemplated a further agreed or determined form of order dealing with payment of the pecuniary penalties and any instalment plan. That means the judgment fixed the penalty amount and the broad relief, while leaving the final mechanics of payment to be settled shortly after judgment.

For business readers, one of the most useful parts of the judgment is the detail about what BPS actually did before and during the launch. The Court recorded that BPS's director, Mr Wiese, considered the legal position complex and decided to obtain specialist legal advice from HWL Ebsworth in October 2019. He understood from that advice that if the project involved a non-cash payment facility, it would constitute the provision of a financial service and would need to be properly licensed.

The Court also recorded a November 2019 teleconference with ASIC, where the proposed issue of Qoin Wallets and their function were discussed. Although ASIC did not provide advice, the discussion included the possibility that BPS might rely on an intermediary authorisation exemption while waiting for an AFSL. BPS then received template agreements and further advice in December 2019 about the obligations that would apply if it issued and promoted the payment facility.

BPS entered arrangements with Billzy in December 2019, later received further advice in 2020 after criticism on social media, lodged an AFSL application on 13 October 2020, entered a PNI authorised representative agreement around 4 November 2020, learned in 2021 that ASIC was investigating, and later entered second Billzy arrangements from 1 September 2021.

All of that mattered because it showed BPS had made genuine attempts to comply. But the Court's findings also show the limits of relying on process alone. If the actual conduct still amounts to dealing in a financial product and giving financial product advice without an AFSL, or if the public statements are still false or misleading, the existence of legal advice and attempted structuring will not necessarily save the business from liability or major penalties.

The judgment also highlights the evidentiary importance of public-facing documents. The Qoin website and White Paper were not treated as background marketing only. They were central to the findings about financial product advice and misleading representations. That is a practical warning for any business using websites, app copy, FAQs, investor decks or white papers to explain a product.

Businesses should read this case as a practical warning about launch discipline in regulated products. If your business is building a wallet, token ecosystem, stored value product, payment app or similar facility, you should not assume it sits outside financial services law because it is framed as technology. The Court treated the Qoin Wallet as a financial product and treated promotional statements as financial product advice.

The case also shows how quickly product risk and marketing risk can merge. A statement that sounds commercial or aspirational to a founder can become a legal problem if it tells customers they can exchange tokens through independent exchanges, use the product with a growing merchant base, or rely on some form of official approval or registration when those things are not true or not supportable. Future-looking claims are especially risky if there are no reasonable grounds for making them at the time.

Another important point is that the absence of direct evidence of consumer reliance or loss did not prevent serious consequences. The judgment expressly notes there was no direct evidence that any consumer relied on the representations and suffered loss or damage. Even so, the Court imposed a very substantial penalty and broad injunctive and corrective orders. Businesses should not assume that a regulator case will only become serious if individual customer loss can be proved in a direct way.

For directors and founders, the governance message is straightforward. If the product sits near the edge of financial services regulation, there should be a clear record of what advice was obtained, what assumptions were made, what authorisations were relied on, and when those assumptions were revisited. But the record must be matched by substance. A paper trail helps explain conduct. It does not cure a defective licensing position or unsupported public claims.

These points do not answer every licensing question, but they reflect the pressure points exposed by the case. The recurring theme is mismatch. Problems arise when the business model, the legal authorisation and the public claims move at different speeds. A startup may build first, market hard and tidy up the licensing later. This case shows how dangerous that sequence can be.

This page is based on the Federal Court's penalty judgment in Australian Securities and Investments Commission v BPS Financial Pty Ltd (Penalty) [2026] FCA 18, including the orders and Annexure A adverse publicity notice reproduced with the judgment. The judgment expressly refers back to the liability decision delivered on 3 May 2024 and the Full Court appeal decision delivered on 30 May 2025.

The penalty judgment provides clear support for the penalty amount, the injunctions, the corrective advertising orders, the costs position, the periods of contravention and the categories of misleading representations. Readers wanting the fullest account of the underlying liability reasoning should also read the 2024 and 2025 decisions referred to in the notice.