The Federal Court of Australia has ruled in favor of financial technology company Block Earner, overturning an earlier decision requiring it to hold a financial services license for its out-of-print crypto products.
Judges David O'Callaghan, Wendy Abraham and Catherine Button, in their April 22 ruling, stated that Block Earner's product related to the fixed return of cryptocurrencies is not considered a financial product, a managed investment scheme or a derivative under the Companies Act.
The judges concluded that Block Earner's product cannot be classified as a financial product or investment product because users were lending cryptocurrencies on fixed terms for interest payments without pooling contributions for additional profits.
The terms were structured like a loan, and users were only exposed to the agreed interest rate, not the company's business.
The Australian Securities and Investments Commission (ASIC), which initiated the case, has been ordered to cover the costs of the proceedings, including appeals.