ASIC has announced that it has commenced civil penalty proceedings in the Federal Court against the fintech company Block Earner.
The company is alleged to have provided unlicensed financial services in relation to its crypto-asset-based products and operated an unregistered managed investment scheme.
According to ASIC, Block Earner offered a range of fixed-yield earning products based on crypto-assets under the names USD Earner, Gold Earner and Crypto Earner.
The regulator alleged that these were all financial products that should have been licensed, as they were a managed investment scheme, a facility through which a person makes a financial investment, and/or a derivative.
“We are concerned that Block Earner offered financial products without appropriate registration or an Australian Financial Services licence, leaving consumers without important protections,” said ASIC deputy chair Sarah Court.
“Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law.”
ASIC is seeking declarations, injunctions, and pecuniary penalties from the court. The date for the first case management hearing is yet to be scheduled.
Ms Court noted that ASIC is aware that many Australian consumers are interested in purchasing or investing in crypto-assets.
“Crypto-assets are risky, inherently volatile and complex, and ASIC remains concerned that potential investors in crypto-assets may not fully appreciate the risks involved,” she said.
“ASIC supports the development of an effective regulatory framework covering crypto-assets to protect consumers and investors.”
Last month, ASIC also commenced civil penalty proceedings against Queensland-based BPS Financial over the promotion of a crypto-asset and placed interim stop orders on crypto funds from Holon Investments Australia.