Melbourne-based cryptocurrency lending firm Helio has been subjected to penalties by the Australian Securities and Investment Commission (ASIC) for making false claims about holding an Australian credit license (ACL).

Enforced since 2009 through the National Consumer Credit Protection Bill, the ACL mandates strict criteria for entities offering financial services to consumers, extending to crypto lenders like Helio.

Helio, a subsidiary of US-based Cyios Corporation, which also owns the NFT platform Randomly, falsely publicized its possession of an ACL 391330 credit license in an August 2019 news article.

However, subsequent investigations by Australian regulators uncovered the anomalies of claims made by Helio. The lender’s assertion of obtaining the license through the acquisition of CashFlow Investments was also debunked.

This breach of conduct violated section 30 of the National Consumer Credit Protection Act 2009. Helio admitted guilt to ASIC’s charges. ASIC withdrew a secondary charge related to content on Helio’s website in February 2019 and pursued action under section 19B(1)(d) of the Crimes Act 1914.

The significance of accurate information dissemination to both existing and potential customers was emphasized by ASIC Deputy Chair, Sarah Court. She noted that Helio’s deceptive claims misled clients into believing they were under the protection of a valid credit license.

Consequently, Helio was handed a non-conviction bond and required to post a recognizance of A$15,000 ($9,600) for 12 months, contingent upon maintaining good behavior.

The company’s sentencing outcome indicates that the firm will face a conviction only if it breaches the stipulated bond conditions. Notably, the potential fine of AUD15,000 is significantly lower than the maximum penalty of AUD160,000 that could have been imposed. The leniency of the sentence is partly attributed to Helio’s admission of guilt in the case.

The ASIC has embarked on a recent crackdown on several crypto firms. Helio’s case follows closely after ASIC’s lawsuit against eToro, a crypto-related trading platform, over concerns that its contract for difference (CFD) product posed risks to investors.

The agency’s estimate indicates that around 20,000 eToro customers suffered losses while trading CFDs between October 2021 and June 2023. eToro, in response, admitted guilt to ASIC’s charges, influencing the subsequent sentencing.

A CFD is a leveraged derivative product enabling speculation on digital asset prices. eToro was among the pioneers in offering bitcoin trading via CFDs and later expanded its support to other cryptocurrencies.

Similarly, in December, ASIC filed a lawsuit against Finder.com, alleging that the financial product comparison site had offered a crypto yield-bearing product without the necessary license.

Featured image from iStock

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