Post: Fintech company pays penalties for crypto product representations

Following ASIC action, fintech company Bobbob Pty Ltd has paid $53,280 to comply with infringement notices regarding representations it made about a crypto-asset linked investment product.

ASIC was concerned that Bobbob made the following representations that had the potential to mislead consumers that the crypto-asset linked investment product:

was approved or licensed by ASIC,
was similar to, and therefore shared some attributes of, a bank account including the risk profile,
was a safe and stable investment with minimal risk of customers incurring capital losses, and
earned all customers an interest rate of 7.6% per annum from the time they invested.
ASIC Deputy Chair Sarah Court said, ‘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.’

During the eight-month period the Savings Product was offered, approximately 700 customers deposited funds totalling around $1.6 million.

ASIC has also accepted a court enforceable undertaking from Bobbob and its sole director Mr Byron Goldberg regarding the representations. The undertakings include that:

Bobbob and Mr Goldberg will each cease to be an authorised representative of the Australian Financial Services licensee which authorised Bobbob to offer the product,
Bobbob will not provide financial services to retail clients for 12 months, and
Mr Goldberg will himself, not provide, and not be involved in managing a business that provides, financial services to retail clients for 12 months.
‘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,’ concluded Ms Court.

Bobbob paid the infringement notices on 20 September 2023. Payment of an infringement notice is not an admission of guilt or liability.

The specific reasons for ASIC’s concerns are set out in the four infringement notices published on the Infringement notices register and the court enforceable undertaking, which has been published on the Court enforceable undertakings register.

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