In a landmark legal battle, the Australian Federal Court has delivered a ruling largely in favor of the Australian Securities and Investments Commission (ASIC) in its case against BPS Financial Pty Ltd (BPS) over the controversial Qoin scheme.

According to court documents, Judge J Downes issued a verdict on Friday, affirming ASIC's success in its Unlicensed Conduct Case against BPS. However, the ruling excluded the period during which BPS operated as an authorized representative of PNI Financial Services Pty Ltd, holding a non-cash payments license, spanning over 10 months.

The legal dispute traces back to 2022 when ASIC initiated a lawsuit, contending that the entirety of the Qoin project, encompassing the token, blockchain, and wallet, constituted a financial product necessitating a license.

Despite ASIC's argument that the Qoin Blockchain and Qoin Wallets constituted a unified scheme, the court disagreed, emphasizing that these elements did not facilitate non-cash payments.

Legal experts have underscored the significance of the court's refusal to classify an entire blockchain as a "financial product" under Australian law. Michael Bacina, Blockchain Australia Chair and Digital Assets Lawyer, highlighted the ruling's recognition of blockchains as foundational technology, distinct from their legal implications.

Following the ruling, ASIC and BPS are mandated to negotiate and resolve remaining issues, including penalty assessments, scheduled later this month.

The verdict comes amid heightened scrutiny of the crypto landscape in Australia. Cryptocurrency exchange Binance Australia faced disruptions last May due to a decision by its third-party service provider, while ASIC conducted searches at Binance Australia's offices in July.

Furthermore, in March, Australia's prudential regulator directed banks to report their exposures to crypto firms following the collapse of Silicon Valley Bank. In October, the Australian government proposed subjecting digital asset platforms to the same regulations as other financial services providers, aiming to enhance oversight and consumer protection.

In response to tightening regulations, Blockchain Australia has launched initiatives to combat crypto scams and fraud. As the legal landscape evolves, stakeholders anticipate continued dialogue to foster innovation while ensuring regulatory compliance and consumer safeguarding.