ASIC Seeks High Court Clarity on Crypto Yield Products

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), is seeking special leave from the High Court to appeal a ruling that favored crypto firm Block Earner. This move intensifies a legal dispute over the classification of digital asset yield products. ASIC is asking the High Court to clarify whether interest-earning and asset conversion crypto products fall under the Corporations Act as financial products. The appeal follows a Federal Court decision that found Block Earner’s fixed-yield product did not constitute a financial product under current law.

ASIC believes that the definition of a financial product, as drafted in a broad and technology-neutral way, necessitates clarification in the public interest. This clarification is deemed important as it applies to all financial products and services, regardless of whether they involve crypto-assets. Special leave is required to appeal to the High Court of Australia, which grants it only in cases involving significant legal questions or matters of public interest. Appeals are not heard automatically, and ASIC must first obtain the court’s permission.

In April, a decision by the Full Federal Court overturned earlier findings against Block Earner, which ASIC argues had offered a fixed-yield crypto product called "Earner" without a financial services license. The Full Court found the offering did not constitute a financial product under existing law, a setback for ASIC's efforts to bring crypto services under the same regulatory framework as traditional finance. The case was initially brought to the court following an earlier Federal Court ruling in February 2024, which found that Block Earner had engaged in unlicensed conduct when offering the Earner product between March and November 2022. However, the Court dismissed ASIC's claims against Block Earner's variable-yield product, "Access," and in June relieved the company of penalties. That decision was then appealed by ASIC and counter-appealed by Block Earner, culminating in the Full Federal Court's ruling in April 2025.

Block Earner, the trading name of Web3 Ventures Pty Ltd, has since shuttered the product and has stated it has no plans to relaunch it. The company argues that its offering simply allowed customers to loan crypto under fixed terms and receive interest, without pooling funds or exposing users to business risk. "From the outset, we sought to ensure that our modern product suite could fit into a less-modern regulatory environment," said Charlie Karaboga, CEO and co-founder of Block Earner, in April. The High Court has not yet set a date to consider ASIC's application.