The Federal Court of Australia ruled in favor of fintech company Block Earner in an appeal concerning its requirement for a financial services license.
Federal Court Decision
The Federal Court of Australia determined that Block Earner's crypto-related product is not a financial product, managed investment scheme, or derivative under the Corporations Act. Justices David O’Callaghan, Wendy Abraham, and Catherine Button stated that Block Earner’s yield product could not be classified as an investment, as users loaned crypto under fixed terms for interest payments without pooling contributions.
ASIC's Response
The Australian Securities and Investment Commission (ASIC), which initiated the case against Block Earner, has been ordered to cover the legal costs. In an ASIC press release, the regulator stated that it is currently reviewing the court's decision, reflecting on its commitment to enforcing compliance with financial laws.
Future of Block Earner's Products
Despite the legal victory, Block Earner will not be reviving its Earner product, which was discontinued during the legal proceedings. However, the company plans to focus on crypto-backed loan products moving forward. Block Earner’s CCO, James Coombes, expressed hope for a collaborative regulatory process for the industry.
The court's ruling provides clarity on the regulation of cryptocurrency products in Australia and may set a precedent for the future development of fintech companies in the country.
