Block Earner has many tiers of products that provide profits for cryptocurrency holders. However, the Australian Securities and Investments Commission (ASIC) claims these products are unregistered investment schemes.
Hence, those products should be regulated. According to an official statement, the regulator has filed a civil, criminal case in federal court demanding “declarations, injunctions, and fines.” However, the first hearing date has yet to be set by the court.
“We are concerned that Block Earner has provided financial products without the required registration or an Australian financial services license, leaving customers vulnerable,” Sarah Court, vice chair of ASIC, said in a statement.
She further said, “the fact that an investment offering is cryptocurrency-based doesn’t mean it’s illegal under the Financial Services Act.” Block Earner raised more than $4m from venture capitalists, such as Coinbase Ventures and Stani Kulechov (Aave’s CEO), in its first fundraising of 2021.
The firm disburses its users’ funds as loans using the Compound and Aave networks. However, Block Earner CEO Charlie Karaboga disagreed with ASIC’s claims.
Karaboga said, “we are open to regulatory policies in our space. Also, we’ve invested significant resources in building an infrastructure that complies with all regulatory policies. Hence, we offer Australian customers a full range of services that aren’t in disregard of current ASIC standards.”
“For our proposed products with clear regulatory policies, we have applied for the license with the appropriate regulator and notified the ASIC about our intending application for an AFSL,” the CEO added.
The new government indicated in August 2022 that it is ready to begin consultations with stakeholders on a regulatory framework for the crypto industry. However, the Treasury prioritized a token mapping effort this year to further improve regulation.
A public consultation document on token mapping is likely to be released soon.
ASIC Seeks To Design Suitable Crypto Regulatory Framework
ASIC has reiterated its expectations for crypto assets as part of the underlying assets of Exchange Traded Funds (ETFs) and other financial products. The regulator outlines what is expected of market participants, private fund operators, and licensed investment companies (including mutual funds).
Australian Financial Services License (AFSL) primarily focuses on the criteria that ASIC expects from market participants before deciding whether a given crypto asset is an acceptable asset to be traded on the market.
There is no specific legislation in Australia governing blockchain or other distributed ledger technologies (DLT). However, ASIC has a public fact sheet explaining its approach to regulatory concerns. These concerns may arise from using blockchain technology and DLT solutions in general.
HeraldSheets.com produces top quality content for crypto companies. We provide brand exposure for hundreds of companies. All of our clients appreciate our services. If you have any questions you may contact us. Cryptocurrencies and Digital tokens are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by our authors and the views expressed in them do not reflect the views of this website. Herald Sheets is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Read full terms and conditions / disclaimer.