Australia’s High Court has ruled that Web3 Ventures Pty Ltd, operating as Block Earner, needed a financial services licence to offer its fixed-yield crypto product “Earner,” delivering a unanimous 7–0 decision in favor of the Australian Securities and Investments Commission (ASIC).
High court classifies Earner as regulated financial product
The court found that Earner met the legal definition of both a financial investment facility and a derivative under the Corporations Act. Judges determined that returns from the product were tied to the performance of underlying digital assets and exchange rate movements, placing it squarely within existing financial regulations.
The ruling emphasizes that legal classification depends on the substance of a product rather than how it is marketed. The court agreed with ASIC’s position that Australia’s financial laws are designed to be technology-neutral and broad enough to capture emerging crypto-based offerings.
Case returns to federal court for penalties
The matter will now go back to the Full Federal Court to determine penalties for operating without an Australian financial services licence (AFSL). Corporations found in breach can face significant fines, potentially reaching the greater of $11.1 million or 10% of annual turnover.
ASIC first launched civil proceedings in November 2022, arguing the product exposed traders to risk without proper legal safeguards. Earlier rulings in 2024 found Block Earner had operated an unregistered managed investment scheme, though the company was initially spared financial penalties. That relief decision has now effectively been overturned by the High Court.
Regulatory pressure builds on crypto sector
The decision comes as Australia tightens oversight of digital assets. Lawmakers have already passed the Corporations Amendment (Digital Assets Framework) Act 2026, which will bring crypto platforms under the financial services licensing regime starting April 2027.
In the near term, firms face a more immediate deadline. ASIC’s temporary no-action stance on licensing ends June 30, 2026, after which unlicensed operators risk civil and criminal consequences.
Block Earner shifts business model
Block Earner discontinued the Earner product in November 2022 and has since moved away from yield-based services. In May 2026, the company secured an Australian credit licence, becoming one of the first local crypto platforms authorized to issue credit products directly. It is now developing a crypto-backed mortgage offering.
The High Court’s ruling signals that crypto-linked return products will be treated like traditional financial instruments, reinforcing the need for providers to secure licences before offering such services to traders.
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