Key Highlights:
- ASIC challenges court ruling on crypto yield product classification
- Block Earner’s fixed-yield offering ruled not a financial product
- Regulator seeks High Court clarification in public interest
- Case will shape future crypto regulation in Australia
Australia’s financial watchdog ASIC has filed for special leave to appeal to the nation’s highest court after suffering a major legal defeat against crypto lender Block Earner in a case that could reshape how digital assets are regulated.
The Australian Securities and Investments Commission is challenging an April Federal Court ruling that found Block Earner’s fixed-yield product did not qualify as a financial product under corporate law. The court also ordered ASIC to pay the defendant’s legal costs.
ASIC now wants the High Court to clarify whether crypto products that earn interest and convert assets should fall under financial product regulations. The regulator argues that the law’s definition of financial products is “broad and technology-neutral.”
What’s Next: Block Earner has already shut down its Earner product and stated it has no plans to restart it. The company maintained that its offering allowed users to lend crypto under fixed terms without exposure to pooled risks.
The legal battle unfolds as Australia pursues broader regulatory reforms to tighten oversight of its digital asset market. The High Court has yet to schedule a hearing on ASIC’s application.