The Australian Securities & Investments Commission reported that the Full Federal Court has upheld its appeal and found BPS Financial Pty Ltd could not rely on the Corporations Act ‘authorised representative’ exemption when issuing the Qoin Wallet, a non-cash payment facility. The Court held BPS was acting on its own behalf, not as a representative of PNI Financial Services Pty Ltd, meaning BPS was required to hold an Australian financial services licence during the period 5 November 2020 to 30 August 2021. The appeal challenged a 3 May 2024 Federal Court finding that BPS was exempt from licensing requirements for a 10-month period while authorised by PNI. The Full Court declined to consider broader questions about whether an issuer of a financial product can never act in its own capacity while operating as an authorised representative, or whether AFS licensees must always be involved in issuing products sold or promoted by their authorised representatives. The earlier decision also found BPS otherwise engaged in unlicensed conduct and engaged in misleading or deceptive conduct and false or misleading statements concerning the Qoin Wallet; the wallet was issued more than 93,000 times up to 30 September 2022 and BPS received more than AUD 40 million from the sale of Qoin Tokens. The matter will proceed to a penalty hearing on a date yet to be set.

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