In a well-known case concerning its now-defunct Earn product, Finder Wallet, a division of financial comparison website Finder, defeated the Australian Securities and Investments Commission (ASIC) in a significant court victory for the cryptocurrency sector. With significant ramifications for Australian digital asset regulation, the Federal Court of Australia decided in favor of Finder, holding that its crypto yield offering did not qualify as an unlicensed financial product.
The Earn product from Finder, which lets users deposit Australian dollars and earn fixed returns paid in stablecoins, was at the heart of the dispute. According to ASIC, Finder was selling debentures without the required authorization. Before ASIC formally filed charges in 2022, Finder voluntarily shut down the product.
ASIC’s Arguments Are Rejected by the Court
Justice Brigitte Markovic of the Federal Court rejected ASIC’s argument that the Earn product qualified as a financial product that needed a license, such as a debenture. She underlined that Finder had complete control over whether to accept deposits or pay rewards, and that its offering did not entail borrowing money from users in the conventional sense.
This distinction proved to be crucial, as the judge undermined ASIC’s main contention by ruling that customers were not “lending” money in a legally binding way. In addition to absolving Finder of misconduct, the ruling establishes a precedent for the treatment of cryptocurrency-based interest products under Australian law.
A Win for Crypto Innovation Finder applauded the decision, describing it as a win for clarity and innovation. The business released a statement saying, “This decision brings much-needed certainty to the industry.” As long as the structure supports the court’s logic, legal experts think the case might encourage other fintech and cryptocurrency companies in Australia to investigate yield-based offerings without worrying about regulatory overreach right away.
Meanwhile, ASIC has declared that it is examining the ruling and deciding what to do next.
Also read: What Does the US GENIUS Act Mean for Stablecoins?
