Block Earner, a fintech company in Australia, has been sued by the ASIC (Australian Securities and Investments Commission) for selling unlicensed cryptocurrency investment products.
On November 23, ASIC issued a statement saying it had initiated legal proceedings against the company.
According to the press release, ASIC claims that the fintech company’s Earn Products, which include “Crypto Earner,” “USD Earner,” and “Gold Earner,” must be registered under financial services law.
Sarah Court, Deputy Chairman for ASIC, commented, saying:
“We are concerned that Block Earner offered financial products without appropriate registration or an Australian Financial Services licence, leaving consumers without important protections. Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law.”
Block Earner financial products work by depositing Australian dollars into a Block Earner account, converting them to digital assets ($BTC, $ETH, $USDC, etc.),
and then selecting a yield option to start earning.
The interest paid is subject to the volatility of the cryptocurrency market.
Charlie Karagoba, CEO of Block Earner, told Cointelegraph that the company was unaware of the need to register with ASIC because it is registered with AUSTRAC as a digital currency exchange.
He attributed the misunderstanding to the country’s ambiguous regulatory environment and is willing to collaborate with AISC and other regulators.
He continued:
“In an ideal world, we would build these products in a regulatory sandbox with more clarity around licensing regimes. In the future, we look forward to working with ASIC and other regulators in this space.”
ASIC seeks to obtain a court order prohibiting Block Earner from providing such services. However, a date for the first hearing has yet to be set.
Similarly, Ripple Labs is embroiled in a legal battle with the SEC over alleged XRP token sales without a financial permit. This case has been ongoing for nearly two years.
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