Fintech
Australian court overturns ASIC fine against fintech firm Block Earner
An Australian federal court has overturned the fine imposed on Block Earner by the Australian Securities and Investments Commission (ASIC), citing the fintech company’s honest conduct.
ASIC sued Block Earner, claiming its Earner and DeFi Access products were unregistered. However, the court’s decision demonstrates the exchange’s sincere activities regarding its unlicensed crypto income product.
The Court quashes the fine issued by ASIC against Block Earner
On June 4, the Federal Court of Australia he gave an extraordinary ruling that cancels a huge fine expected against Block Earner.
In November 2022, the Australian Securities and Investments Commission (ASIC) subpoenaed Block Earner over its operation. According to the regulator, the fintech company offers some cryptocurrency products without a financial services license.
Additionally, ASIC has classified the products as managed investment plans. Such investment schemes typically involve the fund manager pooling investors’ funds to acquire certain assets.
Although the court confirmed that Block Earner’s crypto income products were unauthorized, it found the company’s honest conduct.
The court found that Block Earner intended to obtain a license during the launch of its Earner product. However, legal advice and internal research indicated that a license was not required for its operations.
Therefore, the presiding judge, Ian Jackman, noted that the fintech company acted in good faith and waived the $234,000 fine imposed by ASIC against the company.
Additionally, Block Earner founder and CEO Charlie Karaboga explained how the exchange sought legal advice before launching the product. They have sought dialogue with the Australian authorities, indicating their willingness to operate within the right legal limits.
Furthermore, reacting to the court’s ruling, Karaboga believes that it is still far from a “just sentence.” She said the company escaped a financial penalty but suffered reputational damage and significant legal costs.
Court reprimands and orders ASIC to pay costs
The court reprimanded ASIC for publishing a “misleading media release” regarding its case with Block Earner and ordered the regulator to pay part of the costs of its legal dispute with the fintech firm.
The rebuke came after Judge Jackman’s February ruling, which found that Earner’s product was unlicensed. However, the judge said that the DeFi Access service did not require a similar license, allowing the company to continue offering it.
Meanwhile, ASIC released a statement titled “Court finds Block Earner crypto product requires financial services license.” The statement said ASIC had failed to overcome the argument that the Access product requires a license.
Reacting to ASIC’s press release, Block Earner said the act was “unfair and misleading”, winning support from Judge Jackman. Therefore, following the February 9 ruling, the judge ordered ASIC to pay the exchange’s legal costs.
Block Earner is seeking $40,000 ($A60,000) in costs, three times its earnings from the product in question. However, ASIC noted that it would seek a review of the court’s ruling via a Press release on June 4th.
The technical report editorial policy is focused on providing useful, accurate content that offers real value to our readers. We only work with expert writers who have specific knowledge of the topics covered, including the latest developments in technology, online privacy, cryptocurrencies, software and more. Our editorial policy ensures that each topic is researched and curated by our in-house editors. We maintain rigorous journalistic standards and every article is 100% written by real authors.