On 24 July 2025, the Full Court of the Federal Court of Australia dismissed the appeal brought by the Australian Securities and Investments Commission (ASIC) in the matter of Australian Securities and Investments Commission v Wallet Ventures Pty Ltd (formerly Finder Wallet Pty Ltd) [2025] FCAFC 93. The appeal concerned ASIC’s contention that the Finder Earn product constituted a debenture and therefore required compliance with the licensing and disclosure provisions of the Australian Corporations Act 2001 (Cth). The Full Court upheld the original Federal Court ruling, which found that the Finder Earn product was not a debenture, and consequently, Wallet Ventures Pty Ltd had not breached the Corporations Act as alleged by ASIC. The decision highlights interpretive challenges within the current statutory framework concerning the classification of debentures and the regulation of crypto-asset related offerings under Australian financial services law.
Definitions
Under the Australian Corporations Act 2001 (Cth), under Division 1, Section 9 “debenture of a body means a chose in action that includes an undertaking by the body to repay as a debt money deposited with or lent to the body. The chose in action may (but need not) include a security interest over property of the body to secure repayment of the money. However, a debenture does not include:
- an undertaking to repay money deposited with or lent to the body by a person if:
- the person deposits or lends the money in the ordinary course of a business carried on by the person; and
- the body receives the money in the ordinary course of carrying on a business that neither comprises nor forms part of a business of borrowing money and providing finance; or
- an undertaking by an Australian ADI to repay money deposited with it, or lent to it, in the ordinary course of its banking business; or
Note: This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(2)).
- an undertaking to pay money under:
- a cheque; or
- an order for the payment of money; or
- a bill of exchange; or
- an undertaking by a body corporate to pay money to a related body corporate; or
- an undertaking to repay money that is prescribed by the regulations.
For the purposes of this definition, if a chose in action that includes an undertaking by a body to pay money as a debt is offered as consideration for the acquisition of securities under an offmarket takeover bid, or is issued under a compromise or arrangement under Part 5.1, the undertaking is taken to be an undertaking to repay as a debt money deposited with or lent to the body.”
ASIC’s Appeal and Court’s Findings
ASIC’s argued that the Finder Earn product constituted a debenture because it involved the raising of funds from customers in return for a fixed yield. ASIC contended that this arrangement fell within the statutory definition under the Corporations Act 2001 (Cth) and that Finder Wallet had engaged in unlicensed financial services conduct.
The Full Federal Court rejected ASIC’s arguments and upheld the earlier decision of the Federal Court. The Court concluded that the Finder Earn product did not meet the statutory definition of a debenture because the arrangement lacked the requisite debt characteristics, despite its fixed-yield structure. As a result, Wallet Ventures Pty Ltd was found not to have breached the Corporations Act in offering the Finder Earn product.
Regulatory Context and Analysis
“Finder Earn” product was not a debenture on the basis that there was no money “deposited with or lent to” the respondent or in the alternative that there was no undertaking by the company to repay as a debt that money”
The dismissal of ASIC’s appeal is based on the limitations of applying existing statutory definitions to emerging crypto-related products. While ASIC argued for a broad application of the debenture provisions under the Corporations Act 2001 (Cth), the Court’s interpretation reflects the need for legislative clarity in regulating novel digital asset products.
This decision clarifies that not all crypto-linked yield products will automatically fall within the ambit of regulated financial products in Australia. However, ASIC has indicated that it is considering the implications of the ruling for its broader regulatory strategy. Entities issuing crypto-related products must remain vigilant, as ASIC’s Information Sheet 225: Crypto-assets confirms that certain offerings may still fall within financial product categories requiring an AFS licence.
Implications for Market Participants
For issuers and intermediaries in the crypto asset sector, the ruling provides short-term certainty that not all fixed-yield products will be treated as debentures. However, the decision also highlights a regulatory gap, raising the possibility of future legislative reform to address crypto yield-bearing products explicitly. Investors and product issuers alike must closely monitor ASIC’s response, as the regulator is expected to pursue further guidance or test cases in its efforts to bring such products within the regulatory perimeter.
This judgment sits within the broader international regulatory landscape, where authorities are grappling with the classification of crypto-related financial products. The Australian position following ASIC v Wallet Ventures Pty Ltd [2025] FCAFC 93 demonstrates judicial reluctance to extend traditional definitions of debt instruments to new crypto yield models absent express legislative mandate.
