On 21 May 2025, the Australian Securities and Investments Commission (ASIC) announced that it is seeking special leave from the High Court of Australia to appeal the Full Federal Court’s ruling in the Block Earner case. The Full Federal Court had determined that a fixed-yield crypto lending product issued by Block Earner did not constitute a “financial product” under the Corporations Act 2001 (Cth). ASIC stated that the appeal is intended to clarify the statutory definition of “financial product” and determine the regulatory scope of interest-earning and asset-conversion products. ASIC emphasised that the definition is designed to be broad and technology-neutral and that clarity from the High Court is required in the public interest. The High Court of Australia will consider ASIC’s application on a date to be fixed.
ASIC’s Legal Position
ASIC’s appeal is in regards to authoritative clarification of the scope of the “financial product” definition in Australian law. The regulator argues that the term, intentionally drafted in a technology-neutral manner, should extend to fixed-yield crypto lending and asset-conversion arrangements. ASIC maintains that the public interest requires certainty on when crypto-linked interest products fall within the licensing and conduct framework of the Corporations Act 2001 (Cth).
Litigation Background and List of Dates
- 9 February 2024: The Federal Court found Block Earner engaged in unlicensed financial services conduct between March and November 2022 by offering its “Earner” product.
- 4 June 2024: The Federal Court relieved Block Earner from liability to pay a penalty in relation to the Earner product.
- 18 June 2024: ASIC appealed the penalty relief ruling.
- 9 July 2024: Block Earner cross-appealed, challenging the finding that a financial services licence was required.
- 6 March 2025: The Full Federal Court heard both ASIC’s appeal and Block Earner’s cross-appeal.
- 22 April 2025: The Full Federal Court allowed Block Earner’s cross-appeal, ruling the Earner product was not a financial product, and dismissed ASIC’s appeal.
- 21 May 2025: ASIC confirmed it will seek special leave from the High Court of Australia to challenge the Full Federal Court’s decision.
Legal Analysis and Implications
The pending High Court application presents an important test of how Australian law treats crypto-asset products under the Australian Corporations Act 2001 (Cth). ASIC’s position is that interest-earning products should fall squarely within the regulatory perimeter, regardless of the technology or assets involved. If the High Court grants leave and rules in ASIC’s favour, the decision could expand the reach of Australian financial services law to a broader range of crypto-linked products. Conversely, if the Full Federal Court’s reasoning stands, providers of fixed-yield crypto products may argue that their offerings are not financial products, provided they avoid structuring features resembling investment facilities.
For global crypto exchanges and product issuers, the outcome of this case will be critical in shaping compliance strategies for the Australian market. It will also signal how courts approach the balance between technological neutrality and investor protection in financial product regulation.
Jurisdictional Context
This matter will further lead to the High Court of Australia in defining the scope of statutory terms under the Corporations Act 2001 (Cth). ASIC’s approach reflects international trends where regulators seek to ensure that crypto-linked yield and lending products are not treated as regulatory exemptions. The outcome of the High Court’s consideration will carry implications beyond crypto assets, as it concerns the general statutory definition of financial products across all financial services in Australia.
