The Australian securities regulator has said it will appeal the federal court’s dismissal of its civil penalty proceedings against Finder Wallet Pty Ltd. The regulator launched penalty proceedings against the crypto firm on Dec. 15, 2022, just days after Finder Wallet withdrew its Earn product.
Australian Securities Regulator Appeals Federal Court Ruling Favoring Finder Wallet
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Product Finder Lacked the Necessary License or Authorization
The Australian Securities and Investment Commission (ASIC) has said it will appeal the federal court’s dismissal of its penalty proceedings against crypto asset service provider Finder Wallet Pty Ltd. In a media statement, ASIC insists that Finder Wallet’s product, Finder Earn, was offered without the necessary license or authorization.
As explained in the statement, the Australian regulator believes Finder Wallet’s Earn product failed to abide by disclosure requirements and did not comply with design and distribution obligations. Finder Wallet, which offered the product starting from late February to Nov. 10, 2022, withdrew it after ASIC expressed its concerns.
After the product’s withdrawal and Finder Wallet’s subsequent reimbursement of user funds, ASIC still launched penalty proceedings against the crypto firm on Dec. 15, 2022. The Australian Federal Court subsequently dismissed ASIC’s arguments in its March 14, 2024, ruling.
ASIC Says Federal Court Judge Erred
However, in its appeal set to be heard by the Full Federal Court on an undetermined date, the ASIC said:
The primary judge erred in holding that the Finder Earn product was not a debenture as
defined by s 9 of the Corporations Act 2001 (Cth) (Act) because there was not a
deposit of moneys or a loan to the Respondent when an investor used the Finder Earn
product (at J[94]-[95]).
Meanwhile, in an attempt to bolster its case against the earlier judgment, the Australian Securities and Investments Commission also references past cases in which the courts agreed with its position. For instance, the regulator cites the federal court’s decision against Block Earner on Feb. 9, 2024.
In another case, the ASIC initiated civil proceedings against BPS Financial Pty Ltd, accusing it of posting misleading statements related to its Qoin crypto asset. The trial for this matter was held Oct. 16-19, 2023, and judgment has been reserved.
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