The island’s financial watchdog has been ordered to pay costs after a tribunal found it had acted unreasonably be exceeding its powers.
AAO Technologies lodged an appeal with the financial services tribunal after the Financial Services Authority refused its application to register as a designated cryptocurrency business.
The FSA had decided to issue a expedited public statement, saying AAO had contravened the 2015 Designated Businesses (Registration and Oversight) Act.
Its statement said AAO had been ‘holding itself out as carrying on a designated business, specifically convertible virtual currency activity’ without having been registered and that this ‘may cause confusion to consumers’.
AAO appealed against both the FSA’s decision not to register the business and its decision to issue the public statement.
The financial services watchdog subsequently – external to the tribunal proceedings – revoked those two decisions.
It argued that having done so, the tribunal had lost its power to make a costs order against the FSA.
But AAO argued this denial of the tribunal’s continuing jurisdiction was ‘vexatious, abusive, disruptive or otherwise unreasonable’.
The FSA had rejected the company’s application to register on September 8 last year.
AAO lodged its appeals with the financial services tribunal on September 29, and on the same day wrote to the tribunal clerk seeking an urgent case management order to prevent the public statement being issued until the first appeal had been determined.
On September 30 tribunal chairman Paul Beckett ordered that the public statement should not be issued until the tribunal had determined the appeals.
On October 24 the FSA informed the tribunal that it would not be resisting the appeals and would be withdrawing and revoking each of its decisions which were the subject of the appeals.
This did not mean that its refusal to register the business had been reversed and instead AAO would have to apply again.
It said it was a matter for AAO whether it wished to continue with the appeals but would resist any order for costs.
In November the tribunal ruled that it did have power to award costs.
And tribunal chairman Mr Beckett has now ordered the FSA to pay the whole of AAO’s costs of its first and second appeals.
Mr Beckett said that FSA’s ‘attempted yet wholly ultra vires’ revocation of its decisions after the appeals process had begun had the effect of ‘usurping’ the authority of the tribunal and undermined the whole appeals process, which was of itself ‘unreasonable’.
He said the FSA had misunderstood its powers.