On Thursday, the Australian Federal Court dismissed ASIC’s case against the crypto firm Finder Wallet. Justice Markovic’s ruling stated that Finder’s Earn product was deemed ‘compliant’ and did not constitute the provision of unlicensed financial services.
ASIC, Australia’s corporate regulator, initiated legal proceedings against Finder Wallet in December 2022, alleging that the Earn product offered a debenture without a required disclosure document. A debenture is a debt instrument utilized by large companies to borrow money at a fixed interest rate without any collateral.
ASIC contended that Finder Wallet’s subsidiary product should have obtained an Australian financial services license. Finder Wallet defended its position in the Federal Court, asserting that ASIC had misconstrued the workings of the ‘Earn’ product.
The company also emphasized that it never assured customers of repaying debts through a deposit. Finder Wallet is registered with AUSTRAC as a Digital Currency Exchange.
Frank Restuccia, Finder’s Global CEO and Co-Founder, welcomed the court’s decision, stating, “We are delighted with this outcome.” He further added, “We understand and respect the importance of good regulation to protect consumers, and we engaged openly and proactively with ASIC from the outset.”
Finder ceased its Earn product in November 2022 and confirmed the return of all customer funds. Restuccia noted at the time that the product had lost its appeal to customers due to escalating interest rates.
A spokesperson from the company informed CoinDesk that Finder has no immediate plans to reintroduce Earn, but did not rule out the possibility entirely, stating, “but never say never.”
ASIC Aims to Protect Investors from Harms Posed by Crypto Offerings
Recently, the market regulator has intensified its oversight of crypto firms offering unregistered financial products.
In November 2022, ASIC took legal action against fintech company Block Earner, accusing it of providing unregistered crypto yield earning products. Last month, a Federal Court concluded the case, affirming that Block Earner had indeed conducted unlicensed financial services by offering its crypto-backed Earner product.
In another instance, ASIC initiated civil penalty proceedings against BPS Financial Pty Ltd regarding its crypto-asset Qoin.
