Australian Court Rules Finder Earn Not Financial Product Citing Decentralized Structure

The Australian Federal Court has delivered a landmark ruling determining that Finder Earn, a crypto yield product offered by Finder Wallet Pty Ltd, does not qualify as a financial product under Australian regulatory frameworks. This decision, announced in July 2025, aligns with an earlier court finding and dismisses the Australian Securities and Investments Commission’s (ASIC) case against the fintech firm [1][2]. The court emphasized that Finder Earn lacks key features of regulated financial products, such as structured risk-sharing or guaranteed returns, distinguishing it from traditional instruments like debentures [3]. The ruling has been hailed as a pivotal moment for Australia’s fintech sector, offering regulatory clarity for crypto-based innovations while raising questions about investor protections.

Finder Earn operates by allowing users to convert Australian dollars into stablecoins, which are then transferred to Finder Wallet to generate annual yields between 4% and 6%. The court’s analysis focused on the product’s structure, concluding that its non-guaranteed, decentralized nature aligns more closely with digital wallet services than financial instruments [4]. This distinction is critical, as it reduces compliance burdens for fintechs offering similar products. Finder’s legal team described the outcome as a victory for innovation, while regulatory experts highlighted the case’s potential to reshape how crypto-based yield tools are classified in the future [2].

The ruling emerged from a dispute initiated by ASIC, which argued that Finder Earn’s model—offering exposure to crypto lending with fixed returns—fell under financial product regulations. The court rejected this, noting that the product’s lack of structured guarantees and its reliance on decentralized networks set it apart from traditional financial services [1][3]. While Finder praised the decision as a win for the broader fintech industry, the outcome has sparked debate about investor safeguards. Without mandatory disclosures or licensing requirements, users may remain unaware of risks such as counterparty defaults or volatility in underlying assets [4]. Regulators may need to reassess definitions of financial products to address modern innovations without stifling growth [3].

The case underscores the challenges of adapting traditional regulatory frameworks to emerging technologies. By prioritizing the "substance" of products over their structural labels, the court has set a precedent for nuanced assessments of crypto and fintech offerings. This approach could encourage more tailored regulatory responses, balancing innovation with consumer protection. Finder’s founder, Fred Schebesta, emphasized the ruling’s broader implications, stating it validates a model where fintechs collaborate with regulators to develop compliant, user-friendly solutions [2]. The decision may also prompt other firms to explore similar products, provided they navigate legal uncertainties with transparency.

Moving forward, the ruling signals a shift in how regulators evaluate crypto services. The court’s focus on operational characteristics rather than broad classifications could influence future cases, particularly those involving staking, lending, or NFT-based products. However, the lack of clear guidelines for such innovations remains a hurdle. Finder’s proactive engagement with ASIC during Earn’s development highlights the value of industry-regulator collaboration, a model that could become standard for fintechs seeking to operate within evolving legal landscapes [1].

Sources:

[1] ASIC. Search Newsroom. https://www.asic.gov.au/newsroom/search/

[2] Australian Financial Review. ASX falls; Macquarie on track to receive strike on pay report. https://www.afr.com/markets/equity-markets/asx-to-rise-wall-st-gains-on-eu-us-trade-hopes-20250724-p5mhd9

[3] ASIC. Media releases. https://www.asic.gov.au/newsroom/media-releases/

[4] Clifford Chance. Regulatory Investigations and Financial Crime Insights. https://www.cliffordchance.com/insights/resources/blogs/regulatory-investigations-financial-crime-insights.html