ASIC challenges court ruling in Finder Wallet crypto case
ASIC has appealed the Federal Court's decision to dismiss its proceedings against Finder Wallet.
The corporate watchdog claimed that Finder Wallet provided unlicensed financial services, breached product disclosure requirements, and failed to comply with design and distribution obligation for its now defunct crypto-asset related product, Finder Earn.
ASIC alleged that the Finder Earn product was a debenture which is essentially an agreement by a company to repay money deposited or lent to it.
The regulator claimed that customers deposited money with Finder Wallet on the understanding that their money would be repaid, along with a return for allowing Finder Wallet to use their capital.
If Finder Earn was a debenture, Finder Wallet would've been required to hold an Australian Financial Services Licence to offer such a product.
However, the court disagreed with ASIC's assertions and ruled in favour of Finder Wallet.
ASIC lodged an appeal today against the decision, stating that it remains concerned that Finder Earn was offered without an appropriate licence or authorisation.
A spokesperson from Finder acknowledged the appeal and reinforced that it relates to the decision made by the Federal Court in March this year. The court found in favour of Finder Wallet and dismissed ASIC's proceedings with costs.
ASIC first commenced civil proceedings against Finder Wallet in December 2022. This followed a string of actions taken by ASIC against firms such as BPS Financial and Bobbob, which also offered crypto-asset related products that it considered to be financial products.
At the time, ASIC deputy chair Sarah Court said that offering a crypto-asset related product doesn't necessarily mean it falls outside the current regulatory regime.
"Issuers of financial products such as debentures must issue appropriate risk disclosure documents and develop appropriate target market determinations to ensure that consumers are not sold inappropriate products," Court said.
"We allege that Finder Wallet failed to do this, potentially putting their customers at risk of harm."
This article first appeared on Financial Standard
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