‘Similar to a Bank Account’: Aussie Fintech Fined for Misrepresentation of Crypto Product

<p dir="ltr">The Australian financial market regulator has taken enforcement action against Bobbob Pty Ltd, a fintech company, for misleading representation of a crypto-asset-linked investment product.</p><p dir="ltr">ASIC Fines Bobbob</p><p dir="ltr">According to the announcement today (Wednesday), the Australian Securities &amp; Investments Commission (ASIC) fined the <a href="https://www.financemagnates.com/terms/f/fintech/">fintech</a> AU$53,280 for the breaches. The actions also involved some <a href="https://www.financemagnates.com/cryptocurrency/asic-seeks-civil-penalty-from-block-earner-for-unlicensed-crypto-offerings/">court-enforceable undertakings</a> from Bobbob and its sole director, Byron Goldberg.</p><p dir="ltr">The undertakings include the cessation of the two from being authorized representatives of any<a href="https://www.financemagnates.com/forex/asic-grants-332-australia-financial-services-license-in-fy23/"> Australia Financial Services (AFS) licensee</a>. Further, the company cannot offer financial services to retail clients for 12 months. Similarly, Goldberg cannot provide or be involved with a business that provides retail financial services for the next 12 months.</p><p dir="ltr">The regulatory actions came due to the company’s misrepresentation of crypto-asset-linked investment products, which had the potential to mislead investors. Between April 2022 and December 2022, around 700 customers deposited funds in the product, totaling about AU$1.6 million.</p><p dir="ltr">Bobbob has now ceased offering the product and returned all customers’ funds.</p><p dir="ltr">The Misrepresentations by the Fintech</p><p dir="ltr">The questionable representation includes the claim of being licensed by <a href="https://www.financemagnates.com/tag/asic/">ASIC </a>and similarity with a bank account, including the risk profile. The company also claimed the crypto product to be the same with minimal risk of losses and offered an annual interest of 7.6 percent.</p><p dir="ltr">“<a href="https://www.financemagnates.com/terms/a/asic/">ASIC</a> was concerned Bobbob’s representations potentially misled customers about the product’s approvals, risks, characteristics, and benefits. As a result, customers may not have fully understood the product they were investing in,” said Sarah Court, ASIC’s Deputy Chair.</p><p dir="ltr">“ASIC will continue to <a href="https://www.financemagnates.com/cryptocurrency/asic-puts-crypto-in-its-2023-enforcement-priorities/">take enforcement action</a> regarding the allegedly misleading promotion of crypto-asset based products that could harm consumers. Crypto-assets can be highly volatile, inherently risky, and complex, making it essential that investors receive accurate information.”</p><p dir="ltr">Although Bobbob paid the monetary penalty and agreed to the undertakings, it did not admit guilt or liability.</p>

This article was written by Arnab Shome at www.financemagnates.com.