An Australian court has sided with the Australian Securities and Investments Commission (ASIC) in a legal dispute involving the crypto startup Block Earner.
The court determined that Block Earner violated the Australian Corporations Act by providing an unlicensed financial product, thereby infringing upon sections 601ED and 911A of the Act.
ASIC prevails against Block Earner
In the recent legal battle between the ASIC and crypto startup; Block Earner, the ASIC emerged victorious as the court ruled in its favor.
The court found that Block Earner’s product offering violated Australia’s Corporations Act — specifically sections 601ED and 911A. In this ruling, Judge Ian Jackman determined that Block Earner operated without the necessary Australian financial services license, breaching the Act.
Additionally, the company was found to have run an unregistered managed investment scheme related to its product.
The judgment, issued on Jan. 31, outlined ASIC’s request for an order against Block Earner’s “Earner” and “Access” products. While the “Access” product is still available, the “Earner” product was discontinued in November 2022, just eight months after its launch in March of the same year.
The ASIC also asserted that both products offered by Block Earner qualify as financial products due to their characteristics resembling a managed investment scheme.
ASIC further argues that this classification indicates Block Earner’s violation of relevant sections of the Corporations Act, as the company lacks an Australian Financial Services Licence (AFSL). ASIC contends that if either the Earner or Access products are deemed financial products or managed investment schemes, Block Earner has breached sections 911A and 601ED(5) of the Act, respectively.
Following a thorough examination of arguments from both ASIC and Block Earner, represented by its co-founder and CEO, Charlie Karaboga, an Australian judge ruled in favor of ASIC.
The judge concurred with ASIC’s assertion
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Author: Ogwu Osaemezu Emmanuel