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

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.

ASIC Fines Bobbob

According to the announcement today (Wednesday), the Australian Securities & Investments Commission (ASIC) fined the fintech AU$53,280 for the breaches. The actions also involved some court-enforceable undertakings from Bobbob and its sole director, Byron Goldberg.

The undertakings include the cessation of the two from being authorized representatives of any Australia Financial Services (AFS) licensee. 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.

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.

Bobbob has now ceased offering the product and returned all customers’ funds.

The Misrepresentations by the Fintech

The questionable representation includes the claim of being licensed by ASIC 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.

“ASIC 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.

“ASIC will continue to take enforcement action 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.”

Although Bobbob paid the monetary penalty and agreed to the undertakings, it did not admit guilt or liability.