ASIC is seeking special leave from the High Court to appeal the Full Federal Court decision which found that a product issued by Block Earner, which allowed consumers to earn fixed yield returns from lending specified crypto-assets, was not a financial product.
ASIC is seeking to obtain the High Court's ruling on what falls within the definition of financial product and clarify when interest-earning products and products involving a conversion of assets from one form into another are regulated.
The definition of financial product was drafted in a broad and technology-neutral way, and ASIC believes it is in the public interest to clarify this. This clarification is important as it applies to all financial products and services whether they involve crypto-assets or not.
The High Court will consider ASIC's application on a date to be determined.
Background
Block Earner is the trading name of Web3 Ventures Pty Ltd. It is an AUSTRAC-registered digital currency exchange.
On 9 February 2024, the Federal Court found that from March to November 2022, Block Earner engaged in unlicenced financial services conduct when offering its Earner product.
The Federal Court dismissed ASIC's allegations that Block Earner's variable-yield digital asset related offering, "Access" was a financial product and that Block Earner engaged in unlicensed financial services conduct by offering Access.
On 4 June 2024, the Federal Court relieved Block Earner from liability to pay a penalty for offering the Earner product.
On 18 June 2024, ASIC appealed the Federal Court's decision to relieve Block Earner from liability to pay a penalty for offering the Earner product.
On 9 July 2024, Block Earner cross-appealed the Federal Court's decision that Block Earner needed a financial services licence to offer its Earner product.
On 6 March 2025, the Full Federal Court heard ASIC's appeal and Block Earner's cross-appeal.
On 22 April 2025, the Full Federal Court allowed Block Earner's cross-appeal and dismissed ASIC's appeal.
