Australia's Federal Court has dismissed a lawsuit by the country's corporate regulator against a sister company of Australian fintech company Finder.com after finding that its high-yield product Finder Earn complies with financial law. .
In an order on March 14, Judge Brigitte Markovich said the Australian Securities and Investments Commission (ASIC) had determined that the Finder Earn product was a debenture (a debt instrument in which a company promises to repay money borrowed) under the Corporations Act. “We have not proven that there is,” the court ruled. interest.
“None of the corporate law violations alleged by ASIC can be established as they are predicated on establishing that the Finder Earn product is a corporate bond. The case is therefore dismissed with costs. ” Judge Markovich ruled.
In December 2022, ASIC sued Finder's subsidiary Finder Wallet, claiming its Finder Earn product was an unlicensed financial product and required exchanges to hold a financial services license.
Finder had “retired” the product a month earlier, claiming that ASIC had notified Finder Wallet of concerns, but a spokesperson told Cointelegraph at the time that this was a “strategic move” due to rising interest rates. “It was a business decision” and “it was not implemented.” Determined by regulatory review. ”
A Finder spokesperson told Cointelegraph that the order was “undoubtedly a landmark victory.”
When asked if Finder would consider restarting the Earn product, a spokesperson said there were no plans at this time and reiterated that the decision to discontinue the product was due to rising interest rates at the time, rather than regulatory action.
Finder Global CEO and co-founder Frank Restuccia said in a March 14 blog post that the company is “pleased with this result, which confirms Finder's compliance with our regulatory obligations.”
“We understand and respect the importance of appropriate regulation to protect consumers and have worked openly and proactively with ASIC from the beginning,” Restoccia added.
Tim Mullally, ASIC's executive director of enforcement and compliance, said in a statement on March 14 that the regulator had found that “this product is being offered without appropriate licenses or authorizations and therefore has no significant consumer protection benefits.” He said he pursued this issue because he thought he would not be able to receive it.
The statement added that ASIC would “carefully consider the judgment”. He noted that the three-judge U.S. Supreme Court has 28 days to file an appeal.
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This comes just over a month after ASIC achieved a partial victory in the Federal Court in its case against cryptocurrency yield platform Block Earner.
In the case, Judge Jackman, the brother of actor Hugh Jackman, ruled that Brock Earner needed a financial services license and could be fined for high-yield Earner products.
Jackman stopped short of classifying Block Earner’s DeFi “Access” product as requiring a license, saying it is not operated under a managed investment scheme.
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