Salerno Law, the Queensland-based law firm, has planned to file a lawsuit accusing BPS Financial Limited, the company behind the QOIN token, of engaging in misleading and deceptive conduct, pyramid selling of financial products, and failing to comply with financial services regulations. The lawsuit will seek $100 million in damages.
It has been reported that Salerno Law, which specializes in crypto disputes, started collecting expressions of interest from investors and merchants who had incurred losses as a result of the seemingly arbitrary limits placed on QOIN sellers last week.
However, QOIN tokens are issued on the company’s proprietary Qoin blockchain. As such, QOIN is not supported by decentralized exchanges and can only be swapped using the “Block Trade Exchange” (BTX), which prevents users from selling more than $125 worth of the token daily.
The report said that users are able to make QOIN purchases between $100 and $10,000. BTX is registered with the Australian Securities and Investments Commission. The BTX Exchange, BPS, and Qoin are all controlled by the same two men, Tony Wiese and Raj Pathak. Pathak and Wiese are also the joint directors of Bartercard, which is a barter trading system that allows businesses to exchange goods and services using a proprietary credit system called “trade dollars.”
Likewise, Salerno Law said that that it had spoken to several holders of QOIN who said they have experienced significant difficulty selling or withdrawing the token on the BTX exchange and redeeming the token at merchants.
“It has been alleged by holders and merchants that they are either unable to accept Qoin payments or exchange the token for fiat currency due to the terms of BTX Exchange, leaving them with a token of no utility.”
Moreover, Qoin denies these claims, describing them as “baseless” in a statement posted on its website on Thursday. Public reviews provided by Qoin users also offer scathing assessments of the project.
One user posted to the website Product Review:
“Qoin is a TOTAL joke. Stay well clear of this company and its dirty dodgy dealings.”
Michelle from New South Wales said:
“0 is my rating. This is NOT and again I will repeat it, NOT an investment. It’s a closed barter system between businesses. Once your money is in, the max you can draw out currently is $125 IF you can.”
Thus, the Salerno suit is not the first time Qoin has come under fire, with local industry association Blockchain Australia expelling Qoin’s membership and requesting for its name and logo to be removed from marketing promotions in February of this year amid accusations it has been engaged in pyramid selling.