High Court Permits ASIC to Challenge Block Earner Over Fixed-Yield Crypto Offering

The Australian High Court has authorized the Australian Securities and Investments Commission (ASIC) to proceed with its challenge against Block Earner concerning its fixed-yield cryptocurrency product. ASIC is seeking pecuniary penalties against Block Earner, alleging that it provided financial services without holding the requisite license. The regulator contends that Block Earner’s crypto product constitutes an “investment arrangement,” thus necessitating an Australian Financial Services Licence (AFSL). Initially, the Federal Court dismissed ASIC’s application; however, this ruling has been overturned by the High Court. The judgment represents a significant victory for ASIC in its endeavor to regulate the cryptocurrency industry. This ruling is anticipated to significantly impact other crypto businesses offering analogous products within Australia. Block Earner maintains that its product does not qualify as an “investment arrangement” and therefore does not require an AFSL. The company is expected to appeal the decision. The case will now continue in the Federal Court.