- Block Earner wins legal battle against ASIC as the court overturns ASIC’s claims.
- The Federal Court of Australia mentioned that Block Earner’s discontinued Earner product was not a managed investment scheme, instead, it was a loan.
- The court also ordered ASIC to cover the legal expenses from the original trial and the appeal.
Block Earner, an Australia-based FinTech company, has secured a victory as the Federal Court of Australia reversed a decision that the platform needs an Australian financial services license (AFSL) to offer its crypto-linked “Earner” product.
The Australian Securities and Investment Commission announced on April 22 that the recent judgment reversed the original decision that the Earner product of Block Earner was a financial product.
The judgment released yesterday mentioned that the discontinued Earner product was not a managed investment scheme, instead, it was a loan. When offered, the product gave the opportunity to loan a limited crypto in return for interest paid at a fixed rate to customers.
This comes after the Australian Securities and Investments Commission (ASIC) sued the company and claimed that it violated corporation laws with both its ‘Access’ and ‘Earner’ products. In February 2024, the Australian Federal Court released a judgment to impose penalties over the Earner product.
Court Orders ASIC To Cover The Legal Expenses
As per the Feb 2024 ruling passed by Judge Ian Jackson, the products were bound to have an AFSL license. As per another ruling of June 2024, Block Earner was relieved from paying the penalty.
The 22nd April judgment mentions that the company should pay a penalty of around $350,000. The three judges of the court rejected the appeal of ASIC made in 2024. Justices David O’Callaghan, Wendy Abraham, and Catherine Button also ordered ASIC to cover the legal expenses from the original trial and the appeal.
ASIC has confirmed through its recent press release that it is considering the decision of the Federal Court. After the victory, the company announced that it would not re-launch its Earner products for the natives of Australia.
The co-founder of Block Earner, James Coombes, said that the product was shut down in November 2022 voluntarily, and the organization has no plans to reintroduce it.
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