ASIC commences proceedings against crypto fintech

Yasmine Raso

Senior Journalist, Financial Newswire

23 November 2022

The Australian Securities and Investments Commission (ASIC) today announced it has initiated civil proceedings in the Federal Court against fintech, Block Earners, for allegedly providing unlicensed financial services related to its cryptocurrency products.

ASIC also alleges the firm conducted an unregistered managed investment scheme (MIS) with its fixed-yield earning crypto-based product suite, the Earner Products, including USD Earner, Gold Earner and Crypto Earner.

“We are concerned that Block Earner offered financial products without appropriate registration or an Australian Financial Services licence, leaving consumers without important protections,” ASIC Deputy Chair, Sarah Court, said.

“Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law.

“ASIC is aware that many consumers are interested in purchasing or investing in crypto-assets. Crypto-assets are risky, inherently volatile and complex and ASIC remains concerned that potential investors in crypto-assets may not fully appreciate the risks involved.

“ASIC supports the development of an effective regulatory framework covering crypto-assets to protect consumers and investors.”

The filing follows months of proceedings instigated by the corporate regulator against several crypto providers, including BPS Financial for misleading statements regarding its crypto asset Qoin, and Holon Investments Australia for non-compliant target market determinations (TMDs) related to three funds investing in a “highly volatile crypto” asset.

Against Block Earners, ASIC is seeking declarations, injunctions, and pecuniary penalties from the Court.