Australian Regulator Sentences Crypto Lender Helio for False License Claims

The Australian Securities and Investment Commission (ASIC) has sentenced Melbourne-based cryptocurrency lending firm Helio for falsely claiming it held an Australian credit license (ACL) in August 2019.

According to an official release from the ASIC, Helio was sentenced to a non-conviction bond and entered into a recognizance of A$15,000 ($9,600) for 12 months on the condition of good behavior.

ASIC Sentences Helio

The Australian securities regulator charged Helio in April 2022, accusing the firm of falsely representing in a news article on its website that it held an ACL, whereas it did not. The lender also mentioned in an investor update that it obtained the license through the acquisition of CashFlow Investments.

However, on both occasions, Helio, which offered crypto-backed loans, was neither an ACL holder nor a representative of an ACL holder, according to the ASIC. The firm’s conduct violated section 30 of the National Consumer Credit Protection Act 2009.

The crypto lender pleaded guilty to ASIC’s charges, and the regulator considered the plea during the sentencing. The Commission withdrew a second charge relating to alleged content on Helio’s website in February 2019 and sentenced the firm under section 19B(1)(d) of the Crimes Act 1914(Cth).

ASIC Deputy Chair Sarah Court said: “We expect entities and individuals to provide accurate information to their customers and potential customers. Helio falsely claimed that it held an Australian Credit license, misleading their customers to believe that they had the protections afforded by such a license.”

ASIC’s Crackdown on Crypto Firms

The ASIC has recently initiated a crackdown on several crypto firms. Helio’s sentencing comes just two weeks after the regulator sued crypto-related trading platform eToro over claims that its contract for difference (CFD) product could harm investors.

A CFD is a leveraged derivative product that enables users to speculate on the prices of digital assets. eToro was among the first firms to allow bitcoin trading via CFDs and later added support for other cryptocurrencies.

CryptoPotato reported that the Aussie regulator argued eToro’s CFD products might not have been tested properly before they were introduced to users due to their high risk and volatility.

The agency also estimated that roughly 20,000 eToro customers lost money between October 2021 and June 2023 while trading CFDs.The crypto lending platform pleaded guilty to ASIC’s charges, and the regulator considered the plea during sentencing.