According to TechFlow, citing The Block on June 17, the High Court of Australia has unanimously ruled in the case involving Block Earner and its former fixed-yield digital asset product, Earner. The court found that Earner qualified as a regulated financial product under Australian law, meaning that offering the product required an Australian financial services licence.
High Court backs ASIC’s appeal
The ruling upheld the appeal brought by the Australian Securities and Investments Commission, known as ASIC. A lower court had previously issued a decision that was more favorable to Block Earner, but the High Court overturned that outcome. The central issue in the case was whether a fixed-yield digital asset product should fall within the scope of Australia’s existing financial product rules, and whether the provider needed to hold the appropriate financial services authorization.
Under the High Court’s decision, the question of Block Earner’s operation of the Earner product without an Australian financial services licence will move into the next stage of the legal process. The court did not complete the penalty portion of the matter, and that part of the case will now return to the Federal Court for further consideration.
Penalty proceedings return to Federal Court
ASIC said the decision confirmed the breadth and technology-neutral nature of the existing definition of financial products. In ASIC’s view, even when a product involves digital assets or other newer forms of financial activity, the current law can still apply without requiring legislative changes, provided the product meets the relevant definition. That statement reflects the key legal point in this case: the use of digital assets did not remove the product from regulatory assessment under Australia’s financial product framework.
Block Earner has already shut down the Earner yield product. The company voluntarily closed the product in November 2022 and has since shifted its business focus to other areas, including the development of home loan products backed by crypto assets. With the High Court ruling now issued, the remaining proceedings will focus on penalty-related questions before the Federal Court.