Aussie Regulator ASIC Slams Block Earner for Offering ‘Unlicensed Financial Services’

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The Australian Securities and Investments Commission (ASIC) has fired up civil penalty proceedings in the Australian Federal Court against Block Earner, a fintech company offering crypto services.

The regulator alleges that Block Earner has been providing unlicensed financial services, and also stands accused of operating an unregistered managed investment scheme.

The product in question

According to a press release issued by the ASIC, the problematic crypto products in question offered by Block Earner include their USD Earner, Gold Earner and Crypto Earner.

The Aussie financial watchdog says, “The Earner Products were financial products that should have been licensed because the products were a managed investment scheme, a facility through which a person makes a financial investment, and/or a derivative”.

Sarah Court, the Deputy Chair said: 

“We are concerned that Block Earner offered financial products without appropriate registration or an Australian Financial Services licence, leaving consumers without important protections. Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law.”

ASIC says that Block Earner — the trading name of Web3 Ventures Pty Ltd — doesn’t hold an Australian Financial Services licence (AFS) licence, even though it is an AUSTRAC-registered digital currency exchange. ASIC also noted that, “Block Earner has been an authorised representative of Flash Partners Pty Ltd since 1 August 2022. This authorisation does not relate to the Earner Product.”

Other Companies in ASIC’s bad books

ASIC is also going after other companies, in aid of what they say is protecting investors “from harms posed by crypto-asset offerings.”

Last October, ASIC started proceedings against BPS Financial Pty Ltd. This was in relation to “misleading statements” made in relation to its notorious crypto asset Qoin.

Qoin has quite the reputation. Subject to many unhappy posts online, warning potential investors to stay away, the crypto was subject to an ABC grilling last year.

Also in October, ASIC placed interim stop orders on Holon Investments Australia Limited. Holon has since wound up the funds in question.

Evidently, the Aussie regulator is paying a close eye on all things crypto, arguably more so since the FTX implosion in which 30,000 Australians lost as much as $80,000.