The Federal Court of Australia has ruled in favor of crypto lender Block Earner, overturning a decision that it needed an Australian financial services license (AFSL) to offer its crypto-linked âEarnerâ product.
The court has dismissed the financial regulator ASICâs suit to impose penalties on the digital asset platform.
Per a Tuesday judgment, the court found that the discontinued âEarnerâ product was a loan, not a managed investment scheme.
The Earner product was offered from March to November 2022, allowing customers to âloanâ specified crypto in return for interest paid at a fixed rate.
ASIC Loses Block Earner Suit
The Australian Securities and Investments Commission (ASIC) initiated the case, alleging violations of corporation laws by both Block Earnerâs âAccessâ and âEarnerâ products.
Per the announcement, the âASIC is seeking declarations, injunctions, and pecuniary penalties from the Court.â
The Australian Federal Court issued a ruling in February 2024, imposing penalties over the âEarnerâ product. According to Judge Ian Jacksonâs order at the time, the products were deemed to require an AFSL license.
However, another ruling in June 2024 relieved Block Earner from paying a penalty in the local financial regulatorâs legal action, as the crypto firm has âacted honestly and not carelessly when it offered the Earner product.â
The regulator believed that Block Earner should pay a penalty of as much as $350,000, the Tuesday judgement read.
Justices David OâCallaghan, Wendy Abraham and Catherine Button have dismissed the ASICâs appeal made last year. Further, the trio had ordered ASIC to cover all legal costs from both the original trial and the appeal.
Per the regulatorâs recent press release, ASIC noted that it is âconsidering this decisionâ of the Federal Court.
No Plans to Re-Introduce âEarnerâ Products
Despite the legal victory, Block Earner noted that it has no plans to re-launch its âEarnerâ products for Australian customers.
Speaking to local media, Block Earner co-founder James Coombes said the Earner product was voluntarily closed in November 2022. Further, he stressed that there is no intention to reintroduce it.
âThis case highlights the importance of ensuring regulations evolve alongside technology,â he said. âWithout modernised guidance, Australia risks losing fintech innovation to offshore markets more supportive of responsible crypto entrepreneurship.â
Additionally, Block Earner co-founder Charlie Karaboga said that the ruling âbrings closure to a long and difficult process.â
The post Australian Federal Court Dismisses ASIC Appeal, Favoring Crypto Lender Block Earner appeared first on Cryptonews.
