Fintech receives infringement notice over crypto product
The corporate regulator has handed over a $53,280 infringement notice to fintech company Bobbob over concerns of potentially misleading customers about its crypto-linked product.
Bobbob’s Savings Product, offered to Australian consumers from 1 April 2022 to 1 December 2022, saw approximately 700 customers deposited funds totalling around $1.6 million.
ASIC noted that crypto-assets could be highly volatile, risky and complex, making it crucial for investors to receive accurate information.
ASIC raised concerns about the company’s 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.
- earned all customers an interest rate of 7.6 per cent 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.”
It also accepted a court enforceable undertaking from Bobbob and its sole director and co-founder, Byron Goldberg, regarding the representations.
These include that:
- Bobbob and Goldberg 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.
- Goldberg will himself, not provide, and not be involved in managing a business that provides, financial services to retail clients for 12 months.
Bobbob paid the infringement notices on 20 September 2023. Payment of an infringement notice is not an admission of guilt or liability, ASIC said.
The fintech firm, which was set up by Goldberg in March 2021, also returned all customers’ funds (with interest) since it ceased offering the product.
According to the 2023 ASX Investor Study, 9 per cent of investors had bought or sold crypto in the past 12 months. Almost a third (29 per cent) are interested in investing in crypto in the next 12 months.
The median value of cryptocurrency holdings by crypto investors is some $5,100.
AUTHOR
Rhea Nath
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