The Australian financial regulator (ASIC) has requested the Supreme Court to consider an appeal against the ruling favorable to Block Earner, in order to clarify the regulations regarding crypto yield products under financial law, opening up an important legal debate.
ASIC Seeks Clear Regulations
ASIC is seeking permission from the Supreme Court to appeal the April 2025 ruling of the Federal Court, which stated that Block Earner's fixed yield product 'Earner' is not a financial product under the Corporations Act. #ASIC seeks to clarify whether interest-generating products and crypto asset conversions fall under financial law. 'The definition of a financial product is drafted broadly and technology-neutral, it needs clarification for the public interest,' ASIC stated.
The appeal process requires 'privilege' from the Supreme Court, granted only for significant legal issues or public interest. ASIC previously sued Block Earner for operating 'Earner' without permission from March to November 2022, but the Federal Court in February 2024 dismissed the allegations against the variable yield product 'Access' and exempted the company from penalties in June 2024.
Reaction from Block Earner
Block Earner, part of Web3 Ventures Pty Ltd, has ceased the 'Earner' product and has no plans for reinstatement. The company believes the product only allowed customers to lend crypto on fixed terms and receive interest, without pooling funds or incurring business risks. CEO Charlie Karaboga told #Decrypt : 'The April ruling from the Federal Court is strong and reasonable, we trust it and will respond through legal channels.' He emphasized that the company continues to operate normally, focusing on compliance and innovation.
Significance and Outlook
The case goes beyond Block Earner, affecting how crypto financial products are managed in Australia. With Bitcoin (104,699 USD) and Ethereum (2,600 USD) growing, the inflow of crypto funds reached 3.4 billion USD last week; a clear legal framework could boost the Australian crypto industry in the next 2-3 years. If ASIC wins, crypto yield products will face stricter regulations; if Block Earner wins, innovation may be encouraged, but investor protection must be ensured.
Conclusion: Legal Turning Point?
ASIC is taking Block Earner to the Supreme Court to clarify the regulations on crypto yield products, which could shape the future of the industry in Australia. Regardless of the outcome, the lawsuit underscores the need for a transparent legal framework to balance innovation and financial safety.
Risk warning: Crypto investment carries high risks due to price volatility and legal uncertainties. Please consider carefully before participating. #anhbacong