The Australian finance regulator is suing fintech firm Block Earner over its unregistered crypto services. The Block Earner CEO countered, calling out the lack of clarity in crypto-related regulations despite demand.
The corporate regulator’s action against “non-regulated” crypto entities continues to see news headlines—this time from Australia.
The respective regulator, the Australian Securities and Investment Commission (ASIC), has taken a tough stance against crypto-offering platforms. Eight days ago, ASIC revoked the FTX exchange’s license to operate within the region.
This time, the regulator took action against a fintech firm, Block Earner, over offering unlicensed crypto-based investment products.
Block Earner facing the heat
On Nov. 23, the said regulator sued Block Earner as it offered three crypto-linked fixed-yield earning products without an Australian Financial Services (AFS) license.
ASIC, in the official blog, stated:
“ASIC has commenced civil penalty proceedings in the Federal Court against fintech company Block Earner alleging it provided unlicensed financial services in relation to its crypto-asset based products and operated an unregistered managed investment scheme.”
Further, ASIC added that the offerings, namely, Crypto Earner, USD Earner, and Pax Gold products, should have been registered as “managed investment schemes.”
ASIC Deputy Chair Sarah Court added,
“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.”
Thereby shedding some light on in-demand crypto-assets and their respective offerings. ‘Crypto-assets are risky, inherently volatile and complex, and ASIC remains concerned that potential investors in crypto-assets may not fully appreciate the risks involved,’ the blog asserted.
A need for a clarity
The watchdog sought financial penalties for Block Earner for its alleged contravention of financial regulation. Nonetheless, the CEO of the fintech firm was quick to counter following this development.
In a statement sent to Business News Australia, Block Earner co-founder and CEO Charlie Karaboga was disappointed with this motion.
“Although we understand the backdrop, this is a disappointing outcome. We welcome regulation in our space and have spent considerable resources building regulatory infrastructure to be able to deliver a whole suite of services to Australian users in a regulated and compliant manner under existing guidelines provided by ASIC.”
Karaboga even raised concerns over the lack of clarity around regulations in Australia regarding crypto-related products. Nonetheless, he remains optimistic. ‘In the future, we look forward to working with ASIC and other regulators in this space to make Australia an innovative space for the crypto industry,’ he opined.
Zooming out a bit, Australia has no clear overall legal framework regarding cryptocurrency dealing. But government bodies are taking steps to provide one.