ASIC has appealed the Federal Court’s decision to relieve Block Earner from liability to pay a penalty for contraventions related to unlicensed financial services when it offered its crypto-related Earner product.
On 4 June 2024, the Court found Block Earner’s contraventions to be serious. However, the Court relieved Block Earner from liability to pay a penalty on the basis, among other things, that it acted honestly and not carelessly when it offered the Earner product.
A copy of ASIC’s Notice of Appeal, which sets out the grounds on which ASIC says the Court erred in granting this relief, is available at the link below.
The appeal will be heard by the Full Federal Court on a date to be determined.
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Background
Block Earner is the trading name of Web3 Ventures Pty Ltd. It is an AUSTRAC-registered digital currency exchange. It does not hold an Australian financial services licence (AFS) licence.
On 9 February 2024, the Court found from March to November 2022, Block Earner had provided unlicenced financial services and operated an unregistered managed investment scheme when offering its fixed-yield Earner product.
The Court dismissed ASIC’s allegations that Block Earner’s variable yield crypto-assets based offering, known in ASIC’s proceedings as the Access product, was a financial product, that Block Earner needed a financial services licence for this product and that the product needed to be registered as a managed investment scheme.
ASIC is not appealing the Court’s findings in relation to Block Earner’s Access product.
Editor's Note:
On 9 July 2024, Block Earner filed a notice of cross-appeal.