Australian Securities Regulator to Appeal Dismissal of Penalty Proceedings Against Finder Wallet

The Australian Securities and Investment Commission (ASIC) has announced its decision to appeal the federal court’s dismissal of its penalty proceedings against crypto asset service provider Finder Wallet Pty Ltd. The regulator alleges that Finder Wallet’s product, Finder Earn, was offered without the necessary license or authorization, failing to comply with disclosure requirements and design and distribution obligations.

Despite Finder Wallet withdrawing its Earn product and reimbursing user funds after ASIC expressed concerns, the regulator proceeded with penalty proceedings on Dec. 15, 2022. However, the Australian Federal Court dismissed ASIC’s arguments in its March 14, 2024 ruling. ASIC contends that the primary judge erred in determining that Finder Earn was not a debenture under the Corporations Act 2001, referencing past cases where the courts agreed with its position. The appeal, set to be heard by the Full Federal Court at a later date, challenges the earlier judgment and uphold ASIC’s regulatory authority.

In a related matter, ASIC references civil proceedings against other entities, including Block Earner and BPS Financial Pty Ltd, as part of its broader efforts to enforce compliance with regulatory standards in the crypto asset space.

ASIC’s commitment to ensure that crypto asset service providers adhere to regulatory requirements, including licensing, disclosure, and consumer protection obligations. The outcome of the appeal will have implications for the regulatory landscape governing crypto assets in Australia and may shape future enforcement actions by ASIC in this evolving sector.