High Court Allows ASIC to Challenge Block Earner Over Fixed-Yield Crypto Product

The High Court of Australia has granted the Australian Securities and Investments Commission special leave to appeal a ruling in favour of digital asset provider Block Earner. The case concerns whether the company’s fixed-yield product, Earner, qualifies as a financial product under Australian law.

Australia’s Full Federal Court previously ruled that Block Earner did not need a financial services licence for the product, overturning an earlier Federal Court decision. ASIC’s claims, including those related to a variable-yield product, were dismissed following the company’s appeal.

Background on Block Earner

Block Earner, operating as Web3 Ventures, offered Earner for a period in 2022, letting investors earn fixed returns on digital assets. ASIC launched proceedings, alleging the company provided unlicensed financial services and ran an unregistered investment scheme.

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In early 2024, the Federal Court found Block Earner had engaged in unlicensed conduct but later relieved the company from paying penalties. The company cross-appealed to challenge the licence requirement.

The High Court granted special leave, on the condition that ASIC cover Block Earner’s legal costs. The regulator must lodge its notice of appeal within two weeks. A hearing date has not yet been set.

Regulator Consolidates Guidance and Legal Instruments

ASIC has cut more than 9,240 pages of regulatory content this year as part of efforts to simplify compliance. The agency consolidated legal instruments, reduced duplicated guidance, and launched digital services to replace paper-based processes.

ASIC is testing ways to reduce obligations for small-company directors and financial advisers, including accepting electronic signatures and email submissions for certain filings.

The simplification aims to reduce costs, clarify rules, and improve enforcement. ASIC oversees 3.6 million companies, 15,500 financial advisers, and thousands of other entities, and its reforms target clearer, more accessible regulation for businesses and consumers.