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Australia’s Top Court Shuts Down ASIC Appeal Against Block Earner in Crypto Case
In a landmark decision, the Federal Court of Australia has dismissed an appeal by the Australian Securities and Investments Commission (ASIC) against fintech firm Block Earner. The case centered around whether Block Earner’s crypto-linked fixed-yield product required a financial services license under the Corporations Act.
As per the April 22 judgment, Justices David O’Callaghan, Wendy Abraham, and Catherine Button ruled that Block Earner’s offering did not constitute a financial product, managed investment scheme, or derivative. The court clarified that users lent their crypto assets under fixed terms, received interest payments, and had no exposure to Block Earner’s broader business operations.
The court emphasized that customers were only entitled to receive fixed interest in return for lending digital assets, which does not meet the definitions ASIC cited under financial law. This determination effectively cleared Block Earner of licensing breach allegations.
In a previous February 2024 ruling, ASIC had initially supported its view but refrained from imposing penalties. However, the court later stated that Block Earner “acted honestly” and relied on legal opinions before launching the product, which led to the appeal by ASIC.
Following this development, ASIC was ordered to pay legal costs for all hearings, including the appeal. The regulatory body has since announced it is “considering this decision” but has not provided further comments.
In response to the outcome, James Coombes, Block Earner’s Chief Commercial Officer, reaffirmed that their product functions as a loan, where customers lend assets in exchange for fixed interest. He underscored that the involvement of crypto assets does not alter its legal definition.
Coombes also confirmed that the company will continue focusing on providing crypto-backed loans instead of fixed-yield offerings. This decision follows recent efforts to regulate the digital asset sector in Australia, including plans for new licensing rules and stricter measures to address debanking.
Block Earner’s triumph has significant implications for the industry, as it sets a crucial precedent regarding regulatory compliance.
Source: https://coinchapter.com/australias-top-court-shuts-down-asic-appeal-against-block-earner-in-crypto-case/
