Block Earner Triumphs in Court, ASICs Appeal Dismissed in Crypto Case
- Full Federal Court rules crypto lending doesnt require a financial license.
- ASIC ordered to pay legal costs after losing appeal in the Block Earner case.
- Ruling sets a precedent for crypto regulation under Australian law.
The Full Federal Court of Australia has sided with crypto lender Block Earner in a major legal dispute with the Australian Securities and Investments Commission (ASIC). The court overturned previous decisions and stated that Block Earners crypto product does not require a financial license.
The court decision will serve as a benchmark for regulation of blockchain-based financial products under Australian laws.
ASIC had claimed that the Block Earner Earner product is a regulated financial instrument that required a financial services license. However, the court established that Earner product operated as a fixed-term loan system rather than an investment product.
The court dismissed ASICs appeal, ruled that the platform had not violated financial regulations, and ordered the regulator to cover legal costs.
Block Earner Crypto Lending Product
Block Earner is a Web3 Ventures Pty Ltd., which operates under the AUSTRAC registration to offer digital currency exchange services. ASIC claimed that Block Earners Earner product, which provided fixed yield returns on crypto investments, required compliance with financial product regulations.
However, the court found that customers participated in crypto lending under fixed terms to receive interest and independent from the companys business outcomes.
The court decision has boosted the Australian fintech sector because it clarifies legal definitions for crypto lending products under the Corporations Act. ASIC previously took measures to fine Block Earner for providing its product without a financial services license but later dropped the complaint.
Moreover, the court established the product was structured like a loan rather than an investment scheme, which exempted it from ASICs regulations.
The court decision marks a major success for Block Earner, which discontinued the Earner product in 2022 after ASIC initiated legal action. Block Earners CEO, Charlie Karaboga, emphasized that the company seeks to offer modern products that adhere to the regulatory framework for digital assets.
The judgment offers clarity for crypto businesses on how financial regulations can be applied to blockchain products.
ASICs Regulatory Approach To Digital Assets
ASIC has faced criticism for its regulatory approach to the crypto sector but has vowed to consider the decision. This court decision and the regulators response could influence future cases on digital asset products and their classification under Australian law.
The court decision builds on the ongoing debate about the regulatory treatment of cryptocurrency and blockchain-based financial services. Australia has an estimated four million active crypto users due to increased crypto adoption across the country.
Read more: https://www.tronweekly.com/australia-court-back-crypto-lender-block-earner/
Text source: TronWeekly
