A Federal court in Australia has relieved the crypto firm Block Earner from paying a penalty for breaching the financial services law when it offered the Earner product. According to the ruling, Block Earner “acted honestly and not carelessly,” hence it should not be made to pay a pecuniary penalty. The Federal Court judge criticized the Australian Securities and Investments Commission (ASIC) for publishing a press release that exhibited “a tendency to mislead.”
Australian Court Exempts Block Earner from Paying Penalty; Criticizes Regulator’s Misleading Press Release
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Block Earner ‘Acted Honestly’
An Australian Federal Court has ruled that the crypto firm Block Earner is not liable to pay a penalty for contraventions related to unlicensed financial services when it offered its Earner product. Although the court found the offence to be serious, it concluded that Block Earner should not be penalized because it “acted honestly and not carelessly” when offering the product.
The court heard the case after the Australian Securities and Investments Commission (ASIC) argued that the Earner product was offered to consumers with important protections. The ASIC asserted that the fact that the product was linked to cryptocurrency did not mean its provision fell outside financial services law.
As previously reported by Bitcoin.com News, the Federal court affirmed the Australian regulator’s position, ruling that the crypto firm’s Earner product offering had violated provisions of the Corporations Act.
Court Ruling A Win for the Global Crypto Industry
Reacting to the court ruling, Block Earner described the verdict as an important step forward for an industry that has faced regulatory uncertainty and active regulatory enforcement globally. Charlie Karaboga, CEO of Block Earner, stated:
From the beginning, it was never our intention to break or circumvent the rules. As a startup, we did everything within our power to comply, including obtaining legal advice and creating a comprehensive risk framework. While we are obviously disappointed about the findings of contravention in relation to the Earner product, we are pleased that the judge recognized our honest efforts and relieved Block Earner from liability for the penalty.
In its statement following the court’s June 4 ruling, the ASIC said it is still reviewing the decision.
Meanwhile, in his ruling, Justice Ian Jackman ordered both parties to pay their respective costs of the proceedings up to February 9. However, the judge declared that ASIC should cover Block Earner’s legal costs from February 9 onwards. Justice Jackman also revealed that ASIC’s legal representatives had acknowledged that the headline in the regulator’s February 9, 2024 press release was incorrect and had “a tendency to mislead.”
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