- An Australian judge has criticized the Australian Securities and Investments Commission (ASIC) for overstating his ruling against Block Earner
- ASIC released a “misleading media release” that misrepresented the judge’s findings
- ASIC has been ordered to cover part of Block Earner’s legal expenses
An Australian judge has criticized the nation’s financial regulator, the Australian Securities and Investments Commission (ASIC), after it overstated his ruling against a cryptocurrency firm. Fintech company Block Earner was ruled in February to have engaged in unlicensed services by offering its crypto-backed Earner product, but the judge in the case this week criticized ASIC for releasing what was termed a “misleading media release” which did not reflect his findings. ASIC will cover part of the legal expenses incurred by Block Earner as a result.
Block Earner Required Partial License
In February, Judge Ian Jackman ruled that Block Earner’s yield-bearing “Earner” product was operating without the necessary license, while its DeFi “Access” service did not require such licensing and could continue its operations. ASIC had initiated legal action against Block Earner in 2022 concerning these two products, which Block Earner fought, with Judge Jackman deciding that Block Earner should not face a penalty for the unlicensed Earner product.
After the ruling, ASIC issued a press release titled “Court finds Block Earner crypto product needs financial services licence.” While the release did acknowledge that ASIC’s claim that Access required a license had been unsuccessful, it was deemed by Judge Jackman to be “unfair and misleading,” as it did not fully reflect the court’s findings. He had recognized that the company had acted in good faith by engaging with the government to clarify the regulations surrounding crypto-related products and services.
As a result, ASIC was ordered to pay the costs incurred by Block Earner following the court’s February 9 decision.
Block Earner has avoided a penalty for a product being found to be infringing and ASIC has been ordered to pay costs due to a misleading media release about the case in the latest cryptolaw case from Australia.#RegulationByEnforcement #CryptoLaw https://t.co/9ftiJmfL3p
— Michael Bacina | ⚖️ | @Sydney (@MikeBacina) June 4, 2024
In a statement, Michael Bacina, Chair of Blockchain Australia, supported the court’s stance, stating, “The court rightly calls out ‘a deeper issue’ that the ‘rules of the legal system are promulgated and clear.’” He emphasized that seeking legal advice in the emerging crypto field is crucial for arguments of penalty relief, adding that crypto projects proceeding without proper legal counsel risk violating the law and losing potential relief arguments if found infringing due to ambiguous regulations.
