Crypto Lender Faced with Penalty: The Cost of Misleading in Blockchain Industry

Anigmatic courtroom scene in chiaroscuro lighting, dominates with colors of honesty and deception. In centre, a cryptocurrency, symbolizing the accused, being weighed on balance scales, the scale tips towards a piece of paper symbolising a bond. Backdrop of blockchain coding, symbolizing the industry the courthouse is built from. Mood: Struggle for truth.

In a recent turn of events, the Australian-based cryptocurrency lender, Helio Lending Pty Ltd, has been issued a non-conviction bond. This comes after the firm falsely claimed to possess an Australian credit license. In an August 2019 news article, Helio claimed to hold this license, when, in fact, it was neither a license holder nor a representative of one at that time.

The Australian Securities and Investments Commission (ASIC) brought these charges against Helio, emphasizing the essentiality of accurate information provision to customers and potential customers. The company’s false claims misled clients to believe they were safeguarded by a valid credit license, according to ASIC Deputy Chair Sarah Court.

Following a guilty plea, Helio was slapped with a non-conviction bond of AUD 15,000 ($9,600) for a year, dependent on good behavior. This bond is considerably lesser than the maximum penalty of AUD 160,000 the firm could have faced. It’s worth noting that the disposition towards leniency was likely impacted by Helio’s admission of guilt.

Helio is known for offering loans backed by cryptocurrencies. Interestingly, it is an Australian subsidiary of US-based Cyios Corporation, and is associated with the upcoming non-fungible token platform, Randombly.

This legal action against Helio underpins ASIC’s broader mission to regulate the volatile cryptocurrency space. ASIC has shown no hesitancy in filing similar lawsuits within the cryptocurrency realm. Trading platform eToro was sued for alleged insufficient screening tests before tendering leveraged derivative contracts to retail investors. Furthermore, financial product comparison site also faced a lawsuit over an unregistered cryptocurrency product.

Australia’s regulations on cryptocurrency have been in the limelight recently following the National Australia Bank’s decision to halt certain “high-risk” payments to cryptocurrency exchanges.

Amid this regulatory ambiguity, Shirazad, a Coinbase executive, along with other cryptocurrency executives, has called for clarified cryptocurrency regulations at a Senate hearing. They are seeking guidelines akin to the Markets In Crypto Assets Regulation (MICA) in Europe.

Whilst some may perceive these actions as an obstruction to the growth of the cryptocurrency market, others see these regulatory attempts as necessary safeguards to protect consumers in the ever-evolving digital finance world.

Source: Cryptonews

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