– Australian court dismissed allegations related to Block Earner’s DeFi “Access” service
– The court ruled that Block Earner engaged in unlicensed financial services with its crypto-backed Earner product
– ASIC sued Block Earner for providing unlicensed fixed-yield earning products based on crypto assets
– The court’s decision provides clarity on when crypto-backed products should be considered financial products requiring licensing under the law
– Block Earner can resume offering its DeFi “Access” service
– Crypto has been under increasing scrutiny in Australia, with various restrictions and regulations being imposed on the industry
Article Summary: Block Earner’s Legal Case and Regulatory Developments in Australia
An Australian court has dismissed some allegations against Block Earner in a legal case brought by the Australian Securities and Investments Commission (ASIC).
Legal Case Overview
The court delivered a split decision, dismissing allegations related to the company’s DeFi “Access” service but ruling that Block Earner had engaged in unlicensed financial services with its crypto-backed “Earner” product. ASIC had sued Block Earner in November 2022, accusing the company of providing unlicensed fixed-yield earning products based on crypto assets.
ASIC’s Comments and Importance of the Decision
ASIC’s Deputy Chair, Sarah Court, noted the decision’s importance and provided clarity on when crypto-backed products should be considered financial products requiring licensing under the law. She emphasized the need for firms offering products with crypto-assets to carefully consider whether their offerings are financial products under the existing regime and ensure appropriate licensing and authorization.
Consequences for Block Earner
Despite the dismissal of allegations related to the DeFi “Access” service, Block Earner will have to pay a fine for its engagement in unlicensed financial services conduct. The company will resume offering the DeFi “Access” service, and a hearing scheduled for March 1, 2024, will determine the fine amount.
Regulatory Developments in Australia
The article highlights increasing scrutiny of crypto in Australia, including actions taken against cryptocurrency exchange Binance Australia, regulatory searches at Binance Australia’s offices, and instructions for local banks to improve their reports on crypto assets.
The Australian government proposed subjecting digital asset platforms to the same laws governing other financial services providers, while Blockchain Australia launched new initiatives to address crypto scams and frauds. Overall, the article illustrates the regulatory landscape and legal developments in Australia’s cryptocurrency industry.
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