High Court Rules Against Block Earner in Landmark Crypto Yield Product Ruling

The High Court of Australia has ruled unanimously that fintech platform Block Earner illegally offered its cryptocurrency yield product. The decision, made on June 17, was a win for the Australian Securities and Investments Commission (ASIC), which had launched civil penalty proceedings against Web3 Ventures Pty Ltd in November 2022.

The court found that investors' funds were used to generate a return for both the investor and the issuer, making it a financial product that required an Australian Financial Services Licence. The High Court panel accepted ASIC's argument that the service functioned as a derivative because the eventual return amount varied by reference to shifting cryptocurrency values and exchange rates.

ASIC Deputy Chair Sarah Court welcomed the decision, stating that 'this reinforces ASIC's long-standing position that the definition of a financial product is broad and technology neutral and so captures new and emerging products without the need to amend the legislation.'