The Australian Securities and Investments Commission (ASIC) has appealed the Federal Court’s decision to exempt Block Earner from paying a penalty for offenses related to unlicensed financial services when it offered its crypto-related product Earner.
On June 4, 2024, the Court ruled that Block Earner’s violations were serious. However, the Court relieved Block Earner of liability to pay a fine on the basis, among other things, that it acted honestly and not recklessly in offering the Earner product.
The appeal will be heard by the Federal Court at a date to be determined.
Block Earner is the trading name of Web3 Ventures Pty Ltd. It is an AUSTRAC registered digital currency exchange. It does not hold an Australian Financial Services License (AFS).
On 9 February 2024, the Court found that from March to November 2022, Block Earner had provided financial services without a license and operated an unregistered managed investment scheme when it offered the Earner fixed income product.
The Tribunal rejected ASIC’s submissions that Block Earner’s cryptocurrency-based variable return offering, known in ASIC proceedings as the Access product, was a financial product, that Block Earner needed a financial services license for that product and that the product should to be registered as a managed investment scheme.
ASIC does not challenge the Tribunal’s findings in relation to the Block Earner’s Access product.