Block Earner, a financial institution in Australia based in Sydney, was sued by the country’s financial regulators in order to provide unlicensed crypto-assets-based investment products. ASIC has started civil penalty proceedings in Federal Court.
- Block Earner would apply for an AFS license too.
- ASIC is too strict in regulating finance service-based companies seeking penalties against the company from the Court
On November 23, The Australian Securities and Investment Commission (ASIC) announced that it is starting civil legal proceedings against Block Earner for providing unlicensed crypto-based investment products.
Block Earner put forward unlicensed crypto-based products such as USD Earner, Gold Earner and Crypto Earner, collectively called ‘Earner Products.’
The concern of ASIC was that the Earner Products were the financial product by which a user makes his investment that must have been licensed because the product is a managed investment scheme.
ASIC Deputy Chair Sarah Court said, “We are concerned that Block Earner offered financial products without appropriate registration or an Australian Financial Services license, leaving consumers without important protections. Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law.”
According to the ASIC report, ASIC is looking for declarations, injunctions, and financial penalties from the Court.
As per the Cointelegraph report, the CEO and co-founder of the company Charlie Karaboga stated in an email to Cointelegraph although the firm “[understands] the backdrop,” it was a “disappointing outcome.”
Karaboga mentioned, “In an ideal world, we would build these products in a regulatory sandbox with more clarity around licensing regimes. In the future, we look forward to working with ASIC and other regulators in this space.”
The CEO clarified “the licensing requirements are clear” because Block Earner had already filed for a credit license and stated that it would apply for an AFS license for its upcoming crypto-based projects in the country.
ASIC, a financial regulator of Australia, aims to make the market safe-secure and transparent for investors. ASIC had previously warned crypto-asset-based companies after the ASIC took action against the creators of the Qoin token and also ASIC’s Moneysmart website provides information to the consumer about the risk in investing crypto-assets.
ASIC mentioned that many Australian laws would apply to the firms providing services such as entities giving advice, dealing, providing insurance, or providing other services based on crypto-asset financial products. These entities should have authorization from an AFS license holder.