Fintech company Block Earner engaged in unlicensed services by offering its crypto-backed Earner product, ruled an Australian Federal Court.
The court though, handed Block Earner a part victory against Australia’s markets regulator by adjudicating that its DeFi “Access” service was not illegal.
An Australian court has given a split decision in a case brought by Australia’s markets regulator against Sydney-based crypto start-up Block Earner.
Judge Ian McNeil Jackman, who is also the brother of actor Hugh Jackman, ruled on Friday that Block Earner engaged in unlicensed financial services conduct when offering its crypto-backed Earner product.
However, Jackman dismissed allegations relating to Block Earner’s DeFi “Access” service. The court will determine the fine Block Earner will have to pay during a scheduled hearing on March 1, 2024.
The Australian Securities and Investments Commission (ASIC) sued Block Earner, alleging the fintech company provided a range of unlicensed fixed-yield earning products based on crypto assets in November 2022. In the same month, Block Earner, which has backing from crypto exchange Coinbase, voluntarily withdrew its fixed-yield “Earner” service.
ASIC Deputy Chair Sarah Court said, “This important decision provides some clarity as to when crypto-backed products should be considered financial products which require licensing under the law.”
“Block Earner can continue offering Access, and the case provides guidance for other crypto businesses highlighting ’a positive step forward’ that ‘provides a glimpse into a future where DeFi can thrive,” the company said in an announcement.
