Crypto-Based ‘Earner’ Product Didn’t Require a License

According to the court’s decision on Tuesday, the previously offered ‘Earner’ product by Block Earner was not classified as a managed investment scheme, as ASIC claimed, but rather seen as a loan-based model. Therefore, it was not subject to regulation under the Australian Financial Services License (AFSL) framework.

The ‘Earner’ product was available between March and November 2022, allowing users to lend specific cryptocurrencies in return for a fixed interest rate.

ASIC’s Appeal Rejected by the Court

The Australian Securities and Investments Commission (ASIC) had initiated legal proceedings, claiming that both the ‘Access’ and ‘Earner’ products violated corporate law. In an earlier ruling in February 2024, the court found the offerings required proper licensing and suggested Block Earner should be penalized.

However, in June 2024, the court concluded that Block Earner had acted with integrity and care, and therefore should not face any financial penalty. ASIC had been seeking a fine of up to $350,000.

Most recently, Judges David O’Callaghan, Wendy Abraham, and Catherine Button dismissed ASIC’s 2023 appeal and ordered the regulator to pay all legal costs associated with both the original trial and the appeal process.

Block Earner Confirms No Return for ‘Earner’ Product

Following the favorable decision, Block Earner clarified that the legal process had come to an end but that there are no plans to relaunch the ‘Earner’ product in Australia.

James Coombes, co-founder of the company, stated that the product was voluntarily shut down in November 2022 and would not be reintroduced. “This case demonstrates the importance of regulatory frameworks evolving with technology,” he said, warning that Australia could fall behind more crypto-friendly jurisdictions if it fails to adapt.

Co-founder Charlie Karaboga also commented on the outcome, saying the ruling “brings closure to a long and challenging chapter” for the company.

ASIC, in a short statement, noted it is still reviewing the court’s decision.

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