According to TechFlow, citing The Block on June 17, Australia’s High Court has issued a unanimous ruling in the case involving Block Earner. The court found that Earner, a fixed-yield digital asset product previously offered by Block Earner, was a regulated financial product. As a result, offering the product required an Australian financial services licence. The decision places the compliance status of the Earner product at the centre of the case and clarifies how this type of digital asset yield arrangement is treated under Australia’s existing financial regulatory framework.
The High Court Sides With ASIC’s Appeal
In its ruling, the High Court supported the appeal brought by the Australian Securities and Investments Commission, or ASIC, and overturned a lower court decision that had previously been more favourable to Block Earner. The dispute focused on whether Earner, described as a fixed-yield digital asset product, fell within the scope of regulated financial products. The High Court concluded that it did, meaning that the provider needed the relevant licence to offer the product.
The case will now return to the Federal Court for further proceedings concerning penalties. In practical terms, the High Court has resolved the question of the product’s regulatory character and the licensing requirement, while the specific penalty issues remain to be determined by the Federal Court. The next stage of the case will therefore focus on the consequences of the finding rather than on whether the product itself was subject to regulation.
ASIC Points to Technology-Neutral Financial Product Definitions
ASIC said the ruling confirms that the existing definitions of financial products are broad and technology-neutral. According to the regulator, even when dealing with newer products such as digital assets, the law does not need to be amended in order for those products to be captured by the regulatory perimeter. ASIC’s statement reflects its position that the current legal framework can apply to certain digital asset-related financial products, depending on the structure of the product and the nature of the service being offered.
Block Earner had already voluntarily shut down the Earner yield product in November 2022. The company has since shifted its business focus to other areas, including the development of home loan products backed by crypto assets. The High Court’s decision does not change the fact that Earner has already been closed, but it provides the final superior-court determination on the product’s legal character in this case and moves the matter into the penalty stage before the Federal Court.