An Australian Federal Court mostly ruled in favor of Australia’s markets regulator in its case against BPS Financial Pty Ltd (BPS) over its Qoin scheme, on Friday, court documents and the regulator’s announcement show.

Judge J Downes ruled that the Australian Securities and Investments Commission (ASIC) “succeeded on its Unlicensed Conduct Case, other than in relation to the period during which BPS was an authorized representative of PNI Financial Services Pty Ltd,” who hold a non-cash payments license. That period was 10 months long, ASIC said.

In 2022, ASIC sued BPS, asking the court to rule that the entire Qoin project, the token, blockchain, and wallet, was a financial product that required a license.

In Australia, ASIC has seen both victories and losses as it ramps up regulatory oversight through legal processes.

Part of this case was ASIC's allegation that the Qoin Blockchain and the Qoin Wallets constituted one single scheme, but the court disagreed.

"Contrary to ASIC’s submissions, the Qoin Blockchain, a means of acquiring Qoin and a means whereby business operators who hold Qoin Wallets can register as Qoin Merchants are not components of, and are not themselves, the mechanism which allows the user to make the non-cash payment," the order said.

Experts said the court made an important rejection of ASIC’s attempts to have an entire blockchain found to be part of a "financial product" under Australian law.

“This is an important judicial recognition of blockchains as foundational technology where the use of the technology if it breaches the law, can (and should) be prosecuted, but the technology itself stands separate," said Blockchain Australia Chair and Digital Assets Lawyer Michael Bacina.

The order asked ASIC and BPS to confer and agree on a form of an order that would resolve the remaining questions, including penalties for later this month.

Read More: Australian Court Dismisses Lawsuit by Market Regulator Against Finder in 'Landmark' Ruling for Crypto Industry