May 21, 2025 – The Australian Securities and Investments Commission (ASIC) has announced it is seeking special leave to appeal to the High Court of Australia following the Full Federal Court's recent decision concerning crypto-asset provider Block Earner. The move signals the regulator's determination to seek ultimate clarity on how financial services laws apply to cryptocurrency products. WEB3AU has been closely following this significant case and has previously reported on the earlier court findings.
The core of the issue revolves around Block Earner's former "Earner" product, which allowed consumers to earn fixed-yield returns from lending specified crypto-assets. In April 2025, the Full Federal Court overturned an earlier Federal Court decision, finding that this particular product was not a "financial product" under the Corporations Act and therefore did not require Block Earner (trading name of Web3 Ventures Pty Ltd) to hold an Australian Financial Services Licence (AFSL).
ASIC is now looking to the nation's highest court to rule on what constitutes a financial product, particularly concerning interest-earning products and those involving the conversion of assets. The regulator emphasized in its announcement on May 21, 2025, that the definition of a "financial product" was intended to be broad and technology-neutral, and believes it is in the public interest to obtain this clarification. According to ASIC, this clarity is crucial as it applies to all financial products and services, irrespective of whether they involve crypto-assets.
The legal saga began when ASIC first took action against Block Earner, an AUSTRAC-registered digital currency exchange. In February 2024, the Federal Court initially found that Block Earner had engaged in unlicensed financial services conduct when offering its Earner product between March and November 2022. However, the court dismissed ASIC's allegations regarding Block Earner's variable-yield "Access" product.
Block Earner subsequently cross-appealed the decision on the Earner product, leading to the Full Federal Court's judgment in April 2025, which sided with Block Earner and found the Earner product did not require an AFSL. ASIC's own appeal regarding a decision to relieve Block Earner from a penalty for the initial contravention was dismissed by the Full Court at the same time.
The outcome of ASIC's application for special leave, and any subsequent High Court appeal if leave is granted, will be keenly watched by the Australian cryptocurrency industry and the broader financial services sector. A High Court ruling could have significant implications for the regulation of digital assets and innovative financial products in the country, potentially setting a major precedent.
The High Court will consider ASIC's application for special leave on a date yet to be determined.