Welcome to another series of Hatchstone Nuggets, where we aim to provide bite-sized, easily digestible information for everyone! Whether you’re a seasoned investor or just starting out, our nuggets are designed to keep you informed and up-to-date with the latest trends, tips, and insights in the world of investment, finance, and beyond.

Background

In May 2024, the Federal Court of Australia ruled that the defendant engaged in unlicensed conduct and made misleading or deceptive representations when offering the ‘Qoin Wallet’, a non-cash payment facility that used a crypto-asset token called ‘Qoin’.

Court Findings

The Court determined that while the Qoin Wallet was a financial product, the decentralized blockchain itself was not.

The defendant contravened the Corporations Act by operating without an Australian Financial Services Licence (AFSL) or proper authorization under a Corporate Authorised Representative Agreement (CARA) for certain periods.

Important Lessons

When operating a fintech business, it is crucial to:

• Obtain the necessary AFSL to avoid breaching the Corporations Act.
• Ensure that all representations about the utility of tokens and their regulatory approval are accurate and truthful.

Stay tuned for more Hatchstone Nuggets, where we will continue to bring you valuable insights and updates to help you navigate the dynamic world of finance and investment.

You may contact us to discuss Australian licensing and regulatory compliance for your business at contact@hatchstone.com.