On 21 May 2025, the Australian Securities and Investments Commission (ASIC) announced it is seeking special leave from the High Court of Australia, the apex court, to appeal a ruling by the Australian Full Federal Court in the ongoing regulatory dispute with Web3 Ventures Pty Ltd, trading as Block Earner. The appeal seeks judicial clarity on the interpretation of the term “financial product” under Australian law, particularly in relation to crypto-asset products offering fixed-yield returns.
The contested product, Block Earner’s “Earner” product, allowed customers to earn a fixed yield by lending specified crypto-assets. The Australian Full Federal Court had ruled that the Earner product did not constitute a financial product under the Australian Corporations Act 2001, a finding that ASIC seeks to contests. ASIC contends that the definition of financial product was deliberately drafted to be broad and technology-neutral, and thus should encompass emerging crypto-asset-based interest products. The ASIC states that clarification from the Australian High Court is required in the public interest, given its implications for the regulation of all financial products, not limited to the crypto sector.
On 9 February 2024, the Australian Federal Court initially found that Block Earner had engaged in unlicensed financial services conduct between March and November 2022 by offering its Earner product. However, the Australian Federal Court dismissed ASIC’s claims regarding another offering, the “Access” product, finding it was not a financial product. On 4 June 2024, Block Earner was relieved from any penalty liability for the Earner product, prompting ASIC’s appeal on 18 June 2024. Block Earner cross-appealed on 9 July 2024, challenging the court’s earlier conclusion that it needed a financial services licence.
The Full Federal Court heard both the appeal and cross-appeal on 6 March 2025 and ultimately ruled in favour of Block Earner on 22 April 2025, overturning the previous decision and dismissing ASIC’s appeal. ASIC is now taking the matter to the Australian High Court, with a hearing date yet to be fixed.
