World Crypto Global
- Written by: Damian Chmiel
- Tue, 18 Jun 2024
- Israel
TheAustralian Securities and Investments Commission (ASIC) has filed an appealagainst a federal court ruling that absolved cryptocurrency provider Block Earner of paying a penalty for offering unlicensed financial services relatedto its digital assets product.ASIC Appeals CourtDecision Relieving Block Earner of Penalty in Crypto CaseTheAustralian regulator announced on Tuesday that it has appealed the FederalCourt's decision and will continue to seek the imposition of a financialpenalty. In the past, it had requested AU$350,000.Interestingly,the Court hadpreviously found that Block Earner engaged in unlicensed financial servicesand operated an unregistered managed investmentscheme from March to November 2022.Despiteacknowledging the seriousness of Block Earner's contraventions, theCourt granted relief on June 4, citing among other factors that the companyhad acted honestly and not carelessly when it offered the Earner product. ASIChas challenged this ruling, filing a Notice of Appeal that outlines the groundson which it believes the Court erred in granting the relief.We have appealed the Federal Courts decision to relieve Block Earner from liability to pay a penalty for contraventions related to its crypto-related Earner product https://t.co/zAzlxNfjqv ASIC Media (@asicmedia) June 18, 2024From thebeginning, it was never our intention to break or circumvent the rules," CharlieKaraboga, CEO of Block Earner, commented after the latest Courts decision."As a startup, we did everything within our power to comply, includingobtaining legal advice and creating a comprehensive risk framework.What Now?BlockEarner, an AUSTRAC-registered digital currency exchange that operates withoutan Australian Financial Services (AFS) license, had faced allegations from ASICthat both its fixed-yield Earner product and its variable-yield Access productconstituted financial products requiring a license. While theCourt upheld ASIC's claims regarding the Earner product, it dismissed theallegations related to the Access product. ASIC has confirmed it will notappeal the Court's findings on the Access product.Crypto-backedproducts should be considered financial products that require licensing underthe law, Sarah Court, ASIC's Deputy Chair, commented in February. Cryptoassets are risky, inherently volatile, and complex. ASIC remains concerned thatconsumers do not fully appreciate the risks associated with products involvingcrypto-assets.The FullFederal Court will hear ASIC's appeal on a date yet to be determined. Theoutcome could set a precedent for how Australian regulators approachenforcement actions against crypto firms and the standards to which such firmsare held in complying with financial services laws.This article was written by Damian Chmiel at www.financemagnates.com.
