An Australian court, presided over by Judge Ian McNeil Jackman, delivered a mixed ruling in a legal battle between Australia’s markets regulator and Sydney-based crypto startup, Block Earner. The court found Block Earner guilty of conducting unlicensed financial services regarding its crypto-backed Earner product, while dismissing allegations concerning its DeFi “Access” service.
The verdict, announced on Friday, marks a significant development in the case, which has been ongoing since November 2022. The Australian Securities and Investments Commission (ASIC) filed a lawsuit against Block Earner, accusing the fintech company of offering various unlicensed fixed-yield earning products based on crypto assets.
Despite the ruling against Block Earner’s Earner product, Judge Jackman’s decision brings some relief to the company, allowing it to continue offering its DeFi “Access” service. The court is set to determine the fine Block Earner will face during a scheduled hearing on March 1, 2024.
ASIC Deputy Chair Sarah Court emphasized the significance of the decision, stating, “This important decision provides some clarity as to when crypto-backed products should be considered financial products which require licensing under the law.”
In response to the verdict, Block Earner, which enjoys backing from crypto exchange Coinbase, expressed optimism about the future. The company views the ruling as a “positive step forward” and believes it offers valuable guidance for other crypto businesses. Block Earner’s statement highlighted the potential for DeFi to flourish in a regulatory environment that fosters innovation.
The outcome of this case underscores the evolving regulatory landscape surrounding cryptocurrencies and decentralized finance. As the crypto industry navigates regulatory challenges, cases like ASIC vs. Block Earner serve as pivotal moments shaping the future of digital finance.
