The Gold Coast cryptocurrency Qoin has rejected concerns raised about its transparency after it was expelled from the peak industry body, Blockchain Australia.
Key points:
- Blockchain Australia has terminated the membership of the cryptocurrency Qoin, which claims to have 28,000 ‘validated merchants’
- Former Blockchain Australia board member says unlike other cryptocurrencies, Qoin is traded in a ‘closed’ system
- But Qoin says it’s ‘appalled’ by Blockchain Australia’s decision and has defended its model
In a statement released last week, Blockchain Australia said that Qoin “has been asked to cease the use of the Blockchain Australia logo and name in connection with their business or promotional activities”.
Blockchain Australia represents at least 70 organisations involved in digital currency, including Victoria’s Department of Economic Development, Jobs, Transport and Resources.
A spokesperson for Blockchain Australia declined to comment further.
But Qoin’s chief marketing officer, Andrew Barker, said the cryptocurrency entity had been “appalled” by the disciplinary action and would continue to trade.
Mr Barker said “we take commentary around three points being scam, ponzi and pyramid on social media”.
“We are licenced to do what we do, and we do it within the means of the law.”
What concerns have been raised?
In September last year, Qoin described its target market as “mum and dad investors”, looking for a cryptocurrency which could be used to purchase goods and services by scanning a QR code.
Qoin-affiliated Facebook groups advertise products ranging from band tickets, cars, clothing and food, to fitness, cleaning and business services.
However, some within the crypto-investor community have raised concerns about Qoin’s transparency.
Alex Saunders is a former board member of Blockchain Australia and founder of Nugget’s News — a cryptocurrency news outlet that has about 250,000 subscribers across its social media platforms.
He said unlike other cryptocurrencies and the exchanges they’re traded on, Qoin is bought and sold exclusively on Block Trade Exchange [BTX].
Both BTX and Qoin are owned by the same company, BPS Financial Limited.
But Mr Barker said BTX and Qoin operated separately.
“A collaboration probably not, commentary or communication, sure,” he said.
“There’s a Qoin value and then there is a price set by the BTX or Block Trade Exchange and they are separate.”
Tech issues impact trade
Qoin became available to purchase in January 2020, with investors able to sell when BTX came online in December.
Mr Saunders said “as soon as people started even trying to sell, it started collapsing”.
Mr Saunders said other cryptocurrency projects had been listed on multiple exchanges and were freely traded, which helped determine “real price discovery”.
On December 15, Qoin released a statement that said “BTX has been inundated with a vast amount of registrations for the buying and selling of the Qoin Digital Currency”.
“We have encountered some delays in completing the AUSTRAC required KYC (Know Your Customer) and bank verification processes,” the statement said.
“We ask for patience and support from the community during this time.”
BTX trades under daily limits
An online fact sheet circulated by BTX states that buyers and sellers can trade in Qoin block sizes between $100 and $10,000, depending on buyer demand.
The ABC understands that daily sale limits ranging from $100 to $250 have been in place for some investors.
Mr Saunders said that meant those with large sums of money invested in Qoin might have been restricted in how much they could sell.
“They’ve got a lot of merchants that accept this currency,” Mr Saunders said.
But Mr Barker said the value of Qoin did not change when it was used to purchase items or services from businesses who also used the cryptocurrency, but that “has no relationship to BTX as a separate entity setting a price”.
“I think that possibly does cause confusion to some but it’s outlined fairly clearly,” Mr Barker said.
Qoin rejects ‘third-party propaganda’
Mr Barker said Qoin responded to Blockchain Australia’s concerns around “the transparency of particular elements of the Qoin value”, which originated from “third-party propaganda” on social media.
“We’re not here to propagate that the value of Qoin will continue to grow, we clearly state that on our website, that indications of Qoin value growing previously is not an indication that Qoin value will grow into the future,” he said.
Mr Barker said he “is not privy” to how much money the “Australian business population and consumers have bought into Qoin”.
The Australian Securities and Investments Commission was not available for comment.
A spokesperson from the Australian Finance Complaints Authority said it had not received complaints about BPS Financial Limited.