Qoin token faces $100M class-action lawsuit over pyramid selling and fraud

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An Australian law firm has revealed plans to file a $100 million class-action lawsuit against a digital currency it claims has conspired to frustrate users who attempt to sell it. The law firm says the people behind the Qoin token lied about its acceptance in 35,000 merchant stores.

Salerno Law, one of the leading digital currency law firms in Australia, intends on filing the class action lawsuit against BPS Financial Limited, the company behind the Qoin token. It claims to have spoken with some Qoin holders that revealed the difficulties they experienced selling their Qoin token.

BPS requires Qoin holders to only sell their tokens at BTX, a digital currency exchange registered with the Australian Securities and Investments Commission (ASIC). This exchange has measures in place to bar users from selling more than $125 of Qoin tokens per day. However, they can purchase any amount from $100 to $10,000.

Reports indicate that Qoin’s parent company and the BTX exchange are controlled by the same two people—Tony Wiese and Raj Pathak.

BPS also misled the Qoin holders about the utility of the token, Salerno Law claims. Its website states that it has signed up over 35,000 merchants, providing Qoin holders with a variety of ways in which they can use their tokens to pay for goods and services. This information is misleading as the token holders have been unable to pay using the token.

The law firm accuses BPS and Qoin of engaging in misleading and deceptive conduct, making misleading representations, and engaging in pyramid selling financial products. It also claims that they failed to comply with financial services obligations, failed to comply with consumer guarantees, and were involved in fraud. These crimes are in violation of the Australian Securities and Investment Commission Act 2001, the Australian Consumer Law and the Corporations Act 2001.

Salerno Law called on Qoin holders that have incurred losses from being unable to use or redeem the token as intended to join their class-action lawsuit.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and
Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.