Australian regulators request the High Court to allow an appeal in the Block Earner case.

Source: Cointelegraph Original text: "Australian regulators request the High Court to allow an appeal in the Block Earner case"

Australia's financial regulator will seek leave from the High Court to appeal a lower court's ruling in favour of fintech company Block Earner. The ruling found that the company's cryptocurrency-related fixed income products were not financial products.

The Australian Securities and Investments Commission (ASIC) said on May 21 that it would like to ask the High Court of Australia to clarify the definition of financial products and the circumstances under which interest-income products and asset form conversions are regulated.

"The definition of financial products is drafted in a broad and technology-neutral manner, and ASIC believes that clarifying this is in the public interest," the regulator stated.

"This clarification is very important as it applies to all financial products and services, regardless of whether they involve crypto assets."

On April 22, federal court judges David O’Callaghan, Wendy Abraham, and Catherine Button ruled that Block Earner's cryptocurrency-related fixed income products do not fall under financial products, managed investment schemes, or derivatives as defined by the Corporations Act.

ASIC said the court will consider its application. An appeal to the High Court requires special leave which will only be granted if it is able to answer a significant question of law or a matter of public interest.

A Block Earner spokesperson told Cointelegraph that this matter has now escalated into a "broader legal issue" involving the definition of financial products, a question that "goes far beyond Block Earner and the crypto industry."

"We believe that the ruling of the full federal court in April is a strong and well-reasoned decision that upholds the legality of our operations," said the spokesperson. "We are confident in the rationality of this ruling and will respond to ASIC's application through appropriate legal channels."

ASIC first filed a lawsuit against Block Earner in November 2022, claiming that the company needed a financial services license to offer its yield products, which had been available since March 17, 2022, until the company closed the product on November 16.

In February 2024, an Australian court initially ruled that the fintech company needs a financial services license to operate its cryptocurrency yield products.

In June 2024, another ruling by the Federal Court of Australia exempted Block Earner from any financial penalties, as it acted "in good faith" and sought legal advice before launching its products, which ASIC appealed.

Block Earner appealed to the federal court regarding its requirement for a financial services license on July 9, 2024.

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