Australia’s top court sides with Block Earner, dismisses financial regulator’s suit
The Federal Court of Australia has sided with fintech firm Block Earner in an appeal against a ruling that found it was required to hold a financial services license for its now-discontinued crypto-related products.
Block Earner’s crypto-linked fixed-yield earning product is not a financial product, or a managed investment scheme, and is not a derivative under the Corporations Act, Justices David O’Callaghan, Wendy Abraham and Catherine Button said in an April 22 judgment.
The trio said Block Earner’s yield product couldn’t be classed as an investment or financial product because users loaned crypto under fixed terms for interest payments and didn’t pool contributions to generate further benefits. The terms and conditions framed it as a loan, and users had no exposure to the firm’s business outside of the agreed interest rate, they added.
The Australian Securities and Investment Commission (ASIC), which first brought the case, has been ordered by the court to pay costs for the proceedings, including appeals. The regulator said in an April 22 press release that it is currently “considering this decision.”
Block Earner’s chief commercial officer, James Coombes, told Cointelegraph the court decision brings clarity that crypto assets shouldn’t be treated differently from other asset classes when applying existing laws.
“Our product was simply defined as one where customers would lend their assets to us for a fixed return, there was no share in the upside of the pool of assets and as such no Managed Investment Scheme existed,” he said.
“The fact that it included crypto assets should not alter that simple definition, and I believe this case forms a bedrock for ambitious brands around Australia to build from.”
An ASIC spokesperson declined further comment.
Earner product won’t make a return
Despite the win in court, Block Earner will not be reviving its Earner product after axing it when legal proceedings began, but Coombes said that “crypto-backed loans products remain the core focus of the company.”
“Regulation going forward is not an easy task, and we empathise with the regulators on this point,” Coombes added. “We hope a collaborative process can bring about positive change.”
Related: Australia outlines crypto regulation plan, promises action on debanking
ASIC launched civil legal proceedings in November 2022, arguing that Block Earner needed an Australian Financial Services License to offer its three crypto-linked fixed-yield earning products.
In February 2024, an Australian court initially found the fintech firm would need a financial services license to operate its crypto yield-bearing products.
Another June 2024 ruling released Block Earner from any financial penalties because it had “acted honestly” and pursued its legal opinions before launching the products, which ASIC appealed.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
A group of Senate Democrats has probed Federal Housing Finance Agency director William Pulte over his order to propose how to consider crypto in mortgage applications.
Politics
Sir Keir Starmer set for Donald Trump trade talks as PM walks diplomatic line between EU allies and US on Gaza
Gaza and transatlantic trade are set to dominate talks between Donald Trump and Sir Keir Starmer when the pair meet in Scotland on Monday.
Downing Street said the prime minister would discuss “what more can be done to secure the ceasefire [in the Middle East] urgently”, during the meeting at the president’s Turnberry golf course in Ayrshire.
Talks in Qatar over a ceasefire ended on Thursday after the US and Israel withdrew their negotiating teams.
Mr Trump blamed Hamas for the collapse of negotiations as he left the US for Scotland, saying the militant group “didn’t want to make a deal… they want to die”.
Sir Keir has tried to forge close personal ties with the president, frequently praising his actions on the world stage despite clear foreign policy differences between the US and UK.
The approach seemed to pay off in May when Mr Trump announced the agreement of a trade deal with the UK that would see several tariffs lowered.
The two leaders are expected to discuss this agreement when they meet, with the prime minister likely to press the president for a lowering of outstanding tariffs on imports such as steel.
Prior to the visit, the White House said the talks would allow them to “refine the historic US-UK trade deal”.
Extracting promises from the president on the Middle East may be harder though.
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Should aid be dropped into Gaza?
Despite some reports that Mr Trump is growing frustrated with Israel, there is a clear difference in tone between the US and its Western allies.
As he did over the Ukraine war, Sir Keir will have to walk a diplomatic line between the UK’s European allies and the White House.
On Thursday, French President Emmanuel Macron announced his country would formally recognise a Palestinian state in September, the first member of the G7 to do so.
That move was dismissed by Mr Trump, who said it “doesn’t carry any weight”.
Read more from Sky News:
US and EU agree trade deal – with bloc facing 15% tariffs
Geldof accuses Israel of ‘lying’ about Gaza starvation
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Trump: ‘It doesn’t matter what Macron says’
The UK, French and German leaders spoke over the weekend and agreed to work together on the “next phase” in Gaza that would see transitional governance and security arrangements put in place, alongside the large-scale delivery of aid.
Under pressure from members of his own party and cabinet to follow France and signal formal recognition of Palestine, Sir Keir has gradually become more critical of Israel in recent months.
On Friday, the prime minister said “the starvation and denial of humanitarian aid to the Palestinian people, the increasing violence from extremist settler groups, and Israel’s disproportionate military escalation in Gaza are all indefensible”.
Government sources say UK recognition is a matter of “when, not if”, however, it’s thought Downing Street wants to ensure any announcement is made at a time when it can have the greatest diplomatic impact.
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Baby Zainab starved to death in Gaza
Cabinet ministers will be convened in the coming days, during the summer recess, to discuss the situation in Gaza.
The UK has also been working with Jordan to air drop supplies, after Israel said it would allow foreign countries to provide aid to the territory.
President Trump’s trip to Scotland comes ahead of his second state visit to the UK in September.
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Downing Street says Ukraine will also likely be discussed in the meeting with both men reflecting on what can be done to force Russia back to the negotiating table.
After the meeting at Turnberry, the prime minister will travel with the president to Aberdeen for a private engagement.
Mr Trump is also expected to meet Scottish First Minister John Swinney while in the country.
The US housing regulator’s decision to recognize crypto assets in mortgage applications marks a historic shift from exclusion to integration, opening new pathways to homeownership.
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