- J McGlynn and M Bacina
Qoin faces $100M class-action over consumer protection claims by token holders
BPS Financial Limited (BPS) - the company behind Qoin, has been sued in a class action filed in the Queensland Federal Court. The plaintiff’s case alleges unconscionable and misleading and deceptive conduct by Qoin.
The Respondents to the proceeedings include BPS co-directors Tony Wiese and Raj Pathak, three related entities, and the group's two Australian Financial Service License Holders. Mermaid Waters based tech firm Appzoola Pty Ltd, which provides website and mobile-app development services, is the lead applicant in the lawsuit.
At a high level, the consumer protection claims are based on two alleged issues: -
Difficulties Quoin holders experience selling their token - BPS requires that token holders only sell their tokens on the BTX exchange, which imposes an $125 daily withdrawal limits; and
An inability for token holders to use Qoin to pay for as many goods and services as they were first led to believe before purchasing the token.
The restrictions have been described as a "failure of liquidity". The lawyers acting for the applicants have said the alleged conduct has created a loss to token holders in the millions of dollars after the holders had exchanged goods and services or acquired the token at a value set by Qoin. The applicants allege the token has no substantive basis and breaches both accepted cryptocurrency and financial services norms.
BPS director Mr Wiese told the Australian (paywall) that the there has been "a clear misunderstanding" of the Qoin project, and that the Qoin group is "not concerned" with the merits of the class action and will defend the matter "rigorously".
Over 250 Qoin merchants, agents investors and clients have joined the case, which is the first major class action involving a digital currency issued in Australia.