Australian Full Federal Court rules Block Earner did not engage in unlicensed conduct
Australia’s Full Federal Court has allowed an appeal by digital asset service provider Block Earner, finding that Block Earner did not need a financial services licence to offer its digital asset-related Earner product.
The ruling overturns the Federal Court’s original decision that Block Earner’s Earner product was a financial product.
The Australian Securities and Investments Commission (ASIC) had appealed the Federal Court’s decision to relieve Block Earner from liability to pay a penalty for contraventions related to unlicensed financial services when it offered the Earner product. As Block Earner successfully appealed the finding that the Earner product was a financial product, the Full Court considered it did not need to make a finding about the relief from liability to pay a penalty and ASIC’s appeal was dismissed.
The Full Court ordered that ASIC pay costs of the proceedings, including appeals.
ASIC is considering this decision.
Block Earner is the trading name of Web3 Ventures Pty Ltd. It is an AUSTRAC-registered digital currency exchange. It does not hold an Australian financial services licence (AFS) licence.
On 9 February 2024, the Court found that from March to November 2022, Block Earner engaged in unlicenced financial services conduct when offering its fixed-yield digital asset-related Earner product.
The Court dismissed ASIC’s allegations that Block Earner’s variable-yield digital-asset-related offering, known in ASIC’s proceedings as the Access product, was a financial product, that Block Earner needed a financial services licence for this product and that the product needed to be registered as a managed investment scheme.
On 4 June 2024, the Federal Court relieved Block Earner from liability to pay a penalty for offering the Earner product.
On 18 June 2024, ASIC appealed the Federal Court’s decision to relieve Block Earner from liability to pay a penalty for offering the Earner product.
On 9 July 2024, Block Earner cross-appealed the Federal Court’s decision that Block Earner needed a financial services license to offer its Earner product.
On 6 March 2025, the Full Federal Court heard ASIC’s appeal and Block Earner’s cross appeal. Judgment was reserved.
