Key allegations dismissed but unlicensed financial services found
The Federal Court of Australia has issued a mixed ruling in a case involving fintech firm Block Earner and allegations by the Australian Securities and Investments Commission (ASIC) of providing unlicensed crypto financial services.
Justice Ian McNeil Jackman presided over the case and handed down a split decision. While many of ASIC’s allegations against Block Earner regarding its “Access” DeFi service were dismissed, the court found that Block Earner did provide unlicensed financial services through its crypto-backed “Earner” product.
ASIC had accused Block Earner of providing financial services without the proper licensing and registration. Block Earner had previously withdrawn its fixed-yield “Earner” service according to ASIC.
Regulatory clarity and penalties
ASIC Deputy Chair Sarah Court said the ruling provides “clarity” on regulating crypto products as financial products that require licensing. A March 1, 2024 hearing will determine the penalty Block Earner will pay for conducting unlicensed financial services.
Broader crypto scrutiny in Australia
The case comes amid increased scrutiny of crypto firms and products in Australia:
– Binance Australia customers lost access to Australian dollar deposits and withdrawals after ASIC’s searches at Binance’s offices.
– The Australian Prudential Regulation Authority (APRA) asked banks to report exposures to crypto firms after sector instability.
– The Australian government proposed legislation for crypto platforms to obtain licenses, monitoring and audits.
– Blockchain Australia initiated measures to combat crypto scams and fraud through education and roundtables.