The Australian Securities and Investment Commission (ASIC) has fined Melbourne-based bitcoin lending company Helio for false statements about having an Australian credit license (ACL).

Businesses that offer customers financial services are subject to strict regulations under the ACL, which went into effect in 2009 as part of the National Consumer Credit Protection Bill. This includes Bitcoin lenders like Helio.

Helio is a division of Cyios Corporation, a US-based company that owns the NFT platform. Randomly misrepresented its ownership of an ACL 391330 credit license in a news report from August 2019.

FALSE CLAIMS AND ASIC'S ACTION: HELIO

Subsequent investigations conducted by Australian regulatory authorities, however, exposed discrepancies in the claims made by Helio. Furthermore, there was a rebuttal to the lender's assertion that they obtained the license by acquiring CashFlow Investments.

Section 30 of the National Consumer Credit Protection Act of 2009 was broken by this behaviour. To ASIC's accusations, Helio pled guilty. In February 2019, ASIC dropped a supplementary charge concerning the material on Helio's website and instead took legal action under section 19B(1)(d) of the Crimes Act of 1914.

ASIC Deputy Chair Sarah Court emphasized the need to provide accurate information to current and potential consumers. She pointed out that Helio's false representations encouraged customers to believe they were covered by a legitimate credit license.

Helio was consequently given a non-conviction bond and ordered to post a $15,000 ($9,600) recognizance for a year, subject to good behaviour.

According to the sentence ruling, the corporation will only be found guilty if the bail requirements are disregarded. Notably, the possible fine of AUD15,000 is far lower than the maximum penalty that might have been imposed, AUD160,000. The punishment was lenient in part because Helio accepted culpability in the incident.

ASIC'S BROADER ACTION AGAINST CRYPTO FIRMS

The ASIC has recently begun taking legal action against numerous cryptocurrency businesses. Helio's case was quickly followed by the ASIC lawsuit against eToro, a cryptocurrency-related trading platform, on concerns that its contract for difference (CFD) product posed risks to investors.

According to the agency's assessment, around 20,000 eToro users lost money when trading CFDs between October 2021 and June 2023. As a result of eToro's admission of guilt in response to ASIC's accusations, a different sentence was imposed.

A CFD is a leveraged derivative contract that allows for price speculation on digital assets. One of the first trading platforms to provide CFDs for trading bitcoin was eToro, which later expanded its support to include other cryptocurrencies.

Similarly, ASIC sued Finder.com in December, claiming that the financial product comparison website had provided a crypto yield-bearing product without the required authorization.