The Federal Court of Australia has ruled in favor of digital asset platform Block Earner, overturning previous findings that its discontinued crypto lending product, Earner, was a managed investment scheme under the Corporations Act 2001.
Justices O’Callaghan, Abraham, and Button of the Full Court dismissed the Australian Securities and Investments Commission’s (ASIC) appeal while allowing Block Earner’s cross-appeal.
The court nullified all declarations of contravention made by the initial judge and ordered ASIC to cover Block Earner’s legal costs.
This decision concludes a high-profile legal case that raised broader questions about the regulation of blockchain-based financial services in Australia.
The court determined that the Earner product, which offered customers the opportunity to loan cryptocurrency for a fixed interest return, did not meet the legal definitions of a financial product or managed investment scheme.
