An Australian Federal Court on Thursday, dismissed a case filed by ASIC against crypto firm Finder Wallet. The Judgement passed by Justice Markovic stated that Finder’s Earn product was ‘compliant’ and did not provide unlicensed financial services.
The Australian Securities & Investments Commission (ASIC), the nation’s corporate regulator, filed a case against Finder Wallet in Dec. 2022. The regulator alleged that the Finder’s Earn product offered a debenture without a disclosure document.
A debenture is a debt instrument, not backed by any collateral. Large companies use it to borrow money at a fixed rate of interest.
The regulator argued that the subsidiary Finder Wallet product should have had an Australian financial services license. Finder Wallet defended the case in the Federal Court, claiming that ASIC had misunderstood how ‘Earn’ worked.
The firm also stressed that it never promised customers to repay debts through a deposit. Finder Wallet is an AUSTRAC-registered Digital Currency Exchange.
Finder’s Global CEO and Co-Founder, Frank Restuccia welcomed the decision adding that “we are delighted with this outcome.”
“We understand and respect the importance of good regulation to protect consumers and we engaged openly and proactively with ASIC from the outset.”
Finder discontinued its Earn product in November 2022 and confirmed that it had returned all customer funds. Restuccia said at the time that the product has become less attractive to customers due to rising interest rates.
A spokesperson from the company told CoinDesk that Finder is not planning to bring Earn back, “but never say never.”
ASIC Aims to Protect Investors from Harms Posed by Crypto Offerings
The markets regulator has recently tightened its scrutiny against crypto firms offering unregistered financial products.
In November 2022, ASIC took action against fintech company Block Earner, alleging that it offered unregistered crypto yield earning products. A Federal Court closed the case last month declaring that Block Earner indeed engaged in unlicensed financial services conduct by offering its crypto-backed Earner product.
In yet another case, ASIC launched civil penalty proceedings against BPS Financial Pty Ltd in relation to its crypto-asset Qoin.
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