The Federal Court has relieved Block Earner from liability to pay a penalty for contraventions related to unlicensed financial services when it offered its crypto-related Earner product.
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.
ASIC took this case because it was concerned that Block Earner offered the Earner product without an Australian financial services licence, leaving consumers without important protections. Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law.
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.
ASIC is reviewing the decision.
