In Australian Securities and Investments Commission v Web3 Ventures Pty Ltd [2025] FCAFC 58 the Full Federal Court decided that a digital asset product was not a financial product and that the issuer did not require an Australian financial service licence. Background.

The dispute centred on whether the Block Earner product was a “financial product” within the meaning of the Corporations Act. ASIC contended that the product was a financial product because it was: (i) a managed investment scheme; (ii) a facility by which a person made a financial investment; or (iii) a derivative.

If Earner was a financial product, then Block Earner had contravened section 911A of the Corporations Act by carrying on a financial services business without holding an Australian financial services licence.

The Full Federal Court found that the Block Earner product was not a managed investment scheme, was not a financial investment facility and was not a derivative.

Block Earner operates an online platform through its website which offers to its customers various products, including the Earner product.

Block Earner also operates a digital currency exchange service, registered with the Australian Transaction Reports and Analysis Centre, that allows users to exchange Australian dollars into cryptocurrencies and to buy and sell over 100 different cryptocurrencies.

The Earner product allowed customers to “lend” cryptocurrency to Block Earner and receive a fixed rate return over the term of the loan.

Block Earner used the loaned cryptocurrency to generate income by lending the cryptocurrency to third parties.

In Australian Securities and Investments Commission v Finder Wallet Pty Ltd [2024] FCA 228 the Federal Court of Australia also decided that a cryptocurrency related product was not a “debenture”

If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.

Author: David Jacobson
Principal, Bright Corporate Law
Email:
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.