ASIC won its High Court battle: Block Earner's fixed-yield product was a financial product requiring a licence. Penalties now go to Full Federal Court. Crypto firms face stricter rules on yield-bearing offerings.
Alpha Score of 48 reflects weak overall profile with strong momentum, poor value, moderate quality, moderate sentiment.
Australia's High Court ruled that Block Earner's fixed-yield crypto product required a financial services licence, handing the corporate regulator a key victory in a case that tested how existing securities law applies to digital assets.
Block Earner, managed by Web3 Ventures, offered the Earner service, which promised fixed returns tied to cryptocurrency and foreign exchange movements. ASIC sued in November 2022, arguing the product was both an investment facility and a derivative under the Corporations Act, requiring an Australian financial services licence. Block Earner discontinued the offering that same month.
The Federal Court in February 2024 found the product operated an unlicensed managed investment scheme. The court later granted the company relief from monetary penalties. ASIC appealed that relief. Block Earner filed a counter-appeal. The Full Federal Court sided with Block Earner in April 2025, rejecting ASIC's penalty appeal.
The High Court unanimously overturned the Full Federal Court's decision. Seven justices agreed with ASIC that the Earner product met the legal definitions of an investment facility and a derivative. The case now returns to the Full Federal Court, which will reconsider penalties.
Block Earner has since shifted its business model. The company obtained an Australian credit licence in May 2026 and plans to launch Bitcoin-collateralised mortgages. Borrowers would pledge Bitcoin as security for home loans while maintaining their crypto positions. The licensing approval marked a new direction for digital-asset lending in Australia.
The High Court's decision confirms that crypto products offering fixed yields must hold a financial services licence if they meet the legal definition of an investment facility or derivative. ASIC said the ruling provides clarity on its authority over digital asset offerings. The penalty hearing will determine the financial consequences for Block Earner.
The Full Federal Court will set a date for the penalty hearing in the coming months. The ruling echoes a broader trend of Australian courts supporting ASIC's oversight of crypto products, as previously covered in AlphaScala's analysis.
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