The Australian Federal Court handed a major victory to the cryptocurrency industry on Thursday in a “landmark” ruling.
The court dismissed a lawsuit brought against Finder Wallet by the Australian Markets Regulator in December 2022. The lawsuit alleged that the company's product, Finder Earn, was a corporate bond and, as a result, violated the Corporation Law by engaging in financial services business without a license. Holds an Australian Financial Services License (AFSL).
The court found that the Australian Securities and Investments Commission (ASIC) had not established that the Finder Earn product was a corporate bond and ordered it to pay the defendants' costs.
“A landmark case like this provides real guidance and clarity for policymakers and regulators to work with industry to avoid wasted time and costs associated with enforcement enforcement. “This highlights just how important blockchain is,” said Michael Basina, chairman of Blockchain Australia and digital asset lawyer. .
Finder stopped offering its Earn product in November 2022, within days of the FTX meltdown and a month before the lawsuit. ASIC has 28 days to appeal this decision.
A Finder spokesperson told CoinDesk: “We have no plans to bring it back at this time, but we're not saying never.” “We discontinued this product in November 2022 because it was no longer competitive in a world of high interest rates.”
This is the first case in which Australian authorities have characterized crypto assets as corporate debt, and only the second case ASIC has brought against a crypto-related entity seeking to prosecute yield products.
An Australian court had issued a split judgment in February 2024 in a case against Sydney-based cryptocurrency startup Block Earner. The court found that Block Earner engaged in unauthorized financial services conduct in offering virtual currency-backed Earner products, but dismissed the claims regarding Block Earner. DeFi “access” service.
“ASIC pursued this matter because we believed that this product was being offered without appropriate licenses and authorizations and therefore did not benefit from important consumer protections,” said ASIC Executive, Enforcement and Compliance.・Director Tim Mullally said.
The Australian Treasury has announced that it plans to release legislation by 2024 covering licensing and custody rules for crypto asset providers, and if passed, exchanges will have 12 months to transition to the new regime. A reprieve will be granted.
