The Full Court of the Federal Court has dismissed ASIC’s appeal in the Finder Wallet case relating to a crypto-asset related product Finder Earn.
The ruling upheld the original decision of the Federal Court, which found that the Finder Earn product was not a debenture and therefore Finder Wallet (now Wallet Ventures Pty Ltd) had not breached the Corporations Act, as alleged by ASIC.
This decision highlights the challenges in the current regulatory framework concerning debentures and the application of the existing financial services regime to products involving crypto assets.
ASIC is carefully considering the decision and its implications.
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Background
Wallet Ventures Pty Ltd (previously known as Finder Wallet) is an AUSTRAC-registered Digital Currency Exchange.
Entities providing services in relation to crypto-related products should be aware that such products may be financial products. ASIC Information Sheet 225: Crypto-assets provides guidance on the circumstances in which a crypto-related offering may be a financial product.
A range of Australian laws apply to entities giving advice, dealing, providing insurance, or providing other intermediary services for crypto-assets that are financial products. These include the requirement to hold an AFS licence or appropriate authorisation by an AFS licence holder.
ASIC’s Moneysmart website has information for consumers about the risks of investing in crypto-assets.