A federal court in Australia has favored Block Earner, a cryptocurrency company, by relieving it of the responsibility to pay a fine for offering interest-bearing cryptocurrency products without a proper license.
Organizational disappointment?
The ruling today (Tuesday) follows action by the Australian Securities and Investments Commission (ASIC) against Web3 Ventures Pty Ltd, which operates as a Block Earner. The regulatory body said it was “reviewing the decision.”
Block Earner has offered several cryptocurrency-based fixed-return earnings products, including the USD Earner, Gold Earner, and Crypto Earner, collectively known as the Earner Products. The company operates as an AUSTRAC-registered cryptocurrency exchange but does not hold an Australian Financial Services (AFS) licence.
according to ASIC
ASIC
The Australian Securities and Investments Commission (ASIC) is Australia's primary regulator of businesses, markets, financial services and consumer credit. It is empowered under the Financial Service Acts to facilitate, regulate and enforce Australian financial laws. The Australian Commission was established and governed under the Australian Securities and Investments Commission Act 2001. ASIC was initially the Australian securities regulator based on the ASC Act 1989. Initially,
The Australian Securities and Investments Commission (ASIC) is Australia's primary regulator of businesses, markets, financial services and consumer credit. It is empowered under the Financial Service Acts to facilitate, regulate and enforce Australian financial laws. The Australian Commission was established and governed under the Australian Securities and Investments Commission Act 2001. ASIC was initially the Australian securities regulator based on the ASC Act 1989. Initially,
Read this termThese “profit products” are financial products that fall under managed investment programs and require appropriate licensing. It is now seeking declarations, injunctions and financial penalties.
Block Earner actually stopped offering Earner products on 16 November 2022, less than a month after receiving the initial letter from ASIC describing the products as a “managed investment scheme and investment facility”. However, the company confirmed that it has discontinued the product for commercial reasons.
Mixed court decisions
Interestingly, an Australian court also agreed earlier this year that Block Earner needed an AFS license to offer its products. However, the court struck down the regulator's claims to characterize Block Earner's variable-return crypto-asset-based offering as a financial product.
In the final ruling, the court highlighted that Block Earner acted honestly rather than negligently when it offered Earner's product.
ASIC was seeking a civil penalty of A$350,000 from Block Earner. However, the cryptocurrency company responded in court that no penalty should be imposed, with an alternative proposed of a fine of A$60,000, which is equivalent to three times the interest the company received from its Block Earner products.
“It is appropriate that no penalty be imposed, consistent with my conclusion that Block Erner should be absolved of liability,” the judge wrote in the ruling. “Even if I had not granted this mitigation, I would not have granted any punishment.”
A federal court in Australia has favored Block Earner, a cryptocurrency company, by relieving it of the responsibility to pay a fine for offering interest-bearing cryptocurrency products without a proper license.
Organizational disappointment?
The ruling today (Tuesday) follows action by the Australian Securities and Investments Commission (ASIC) against Web3 Ventures Pty Ltd, which operates as a Block Earner. The regulatory body said it was “reviewing the decision.”
Block Earner has offered several cryptocurrency-based fixed-return earnings products, including the USD Earner, Gold Earner, and Crypto Earner, collectively known as the Earner Products. The company operates as an AUSTRAC-registered cryptocurrency exchange but does not hold an Australian Financial Services (AFS) licence.
according to ASIC
ASIC
The Australian Securities and Investments Commission (ASIC) is Australia's primary regulator of businesses, markets, financial services and consumer credit. It is empowered under the Financial Service Acts to facilitate, regulate and enforce Australian financial laws. The Australian Commission was established and governed under the Australian Securities and Investments Commission Act 2001. ASIC was initially the Australian securities regulator based on the ASC Act 1989. Initially,
The Australian Securities and Investments Commission (ASIC) is Australia's primary regulator of businesses, markets, financial services and consumer credit. It is empowered under the Financial Service Acts to facilitate, regulate and enforce Australian financial laws. The Australian Commission was established and governed under the Australian Securities and Investments Commission Act 2001. ASIC was initially the Australian securities regulator based on the ASC Act 1989. Initially,
Read this termThese “profit products” are financial products that fall under managed investment programs and require appropriate licensing. It is now seeking declarations, injunctions and financial penalties.
Block Earner actually stopped offering Earner products on 16 November 2022, less than a month after receiving the initial letter from ASIC describing the products as a “managed investment scheme and investment facility”. However, the company confirmed that it has discontinued the product for commercial reasons.
Mixed court decisions
Interestingly, an Australian court also agreed earlier this year that Block Earner needed an AFS license to offer its products. However, the court struck down the regulator's claims to characterize Block Earner's variable-return crypto-asset-based offering as a financial product.
In the final ruling, the court highlighted that Block Earner acted honestly rather than negligently when it offered Earner's product.
ASIC was seeking a civil penalty of A$350,000 from Block Earner. However, the cryptocurrency company responded in court that no penalty should be imposed, with an alternative proposed of a fine of A$60,000, which is equivalent to three times the interest the company received from its Block Earner products.
“It is appropriate that no penalty be imposed, consistent with my conclusion that Block Erner should be absolved of liability,” the judge wrote in the ruling. “Even if I had not granted this mitigation, I would not have granted any sentence.”