ASIC appeals loss against Finder’s cryptocurrency product

The Australian Securities and Investments Commission (ASIC) is appealing the Federal Court’s decision to dismiss its case against Finder Wallet and its cryptocurrency Earn product.

Back in March, the Federal Court found that Finder Wallet was compliant with Australian financial services law. It was a landmark decision that has the potential to influence future cases regarding cryptocurrency and regulatory compliance within Australia.

“ASIC has appealed the Federal Court’s decision to dismiss ASIC’s proceedings against Finder Wallet Pty Ltd for allegedly providing unlicensed financial services, breaching product disclosure requirements and failing to comply with design and distribution obligations in relation to its crypto-asset related product ‘Finder Earn’,” a press release reads.

“ASIC had alleged that the Finder Earn product was a debenture. The Federal Court disagreed and dismissed ASIC’s proceedings on 14 March 2024. ASIC has appealed this decision because it is concerned that the Finder Earn product was offered without the appropriate licence or authorisation and therefore without the benefit of important consumer protections.”

ASIC originally brought proceedings against Finder Wallet in December 2023, claiming that it offered its now-defunct Earn product without holding an Australian Financial Services Licence (AFSL), thereby breaching financial services laws. ASIC claimed that Finder Earn operated as a debenture, a financial product that requires disclosure with the regulator and the issuance of a target market declaration, both of which the company allegedly failed to provide.

Justice Markovic concluded that ASIC was not able to establish that Finder Earn was a debenture and was operating within legal boundaries.

This wasn’t the only cryptocurrency-related case that ASIC was pursuing at the time. It was also taking actions against Block Earner, which the Federal Court found to have engaged in financial services through its Earner product without an AFSL.

The company was made aware of ASIC’s appeal on Wednesday.

“Finder acknowledges that today ASIC has filed an appeal with the Full Federal Court in relation to proceedings against Finder Wallet regarding its Finder Earn product,” a Finder spokesperson said in an email to SmartCompany.

“The appeal filed by ASIC relates to the decision handed down by the Federal Court in March this year, in which the Honourable Justice Brigitte Markovic found in favour of Finder Wallet and dismissed ASIC’s proceedings with costs.”

Disclosure: the author is a former employee of Finder.