The Full Federal Court has dismissed the appeal brought by the Australian Securities and Investments Commission (ASIC) in the Finder Wallet case relating to a crypto-asset related product Finder Earn.

The ruling upheld the original decision of the Federal Court, which found that the Finder Earn product was not a debenture and therefore Finder Wallet (now Wallet Ventures Pty Ltd) had not breached the Corporations Act, as alleged by ASIC.

ASIC commented:

“This decision highlights the challenges in the current regulatory framework concerning debentures and the application of the existing financial services regime to products involving crypto assets”.

Wallet Ventures Pty Ltd (previously known as Finder Wallet) is an AUSTRAC-registered Digital Currency Exchange.

Entities providing services in relation to crypto-related products should be aware that such products may be financial products.

A range of Australian laws apply to entities giving advice, dealing, providing insurance, or providing other intermediary services for crypto-assets that are financial products. These include the requirement to hold an AFS licence or appropriate authorisation by an AFS licence holder.

Finder Wallet offered Finder Earn between late February and 10 November 2022. Finder Earn customers deposited Australian dollars into their accounts, which were then converted to an Australian dollar-denominated ‘stablecoin’ called TAUD and allocated to Finder Wallet. Customers received Australian dollars back into their accounts when they exited the Finder Earn product. Finder Wallet paid customers (in Australian dollars) an annual compounding return of either 4.01% or, in some circumstances, 6.01%, in exchange for the use of their funds by Finder Wallet.

After ASIC notified Finder Wallet of its concerns, Finder Earn ceased being offered from 24 November 2022 and all funds were returned in full to customers.