Key takeaways
- On June 17, the Australian High Court ruled 7-0 that Block Earner was illegally offering its crypto yield product.
- ASIC’s victory sets a precedent for 2026 that technology-neutral financial laws firmly cover crypto assets.
- The lower courts will then decide whether Web3 Ventures faces civil penalties following ASIC’s appeal.
High Court sides with regulator
In a landmark decision, the High Court of Australia has ruled that a cryptocurrency the yield product was offered illegally without a financial services license. The 7-0 ruling by the country’s highest court on June 17 allows an appeal by the Australian Securities and Investments Commission (ASIC) against Web3 Ventures Pty Ltd, which trades as fintech platform Block Earner.
The decision has a significant impact on the digital assets sector by reaffirming that legislative frameworks are “technology neutral” and broad enough to encompass emerging crypto products without requiring regulatory updates.
The dispute related to the Earner product, offered by Block Earner between March and November 2022. To use the service, customers transferred Australian dollars to a Block Earner bank account. The company then converted these funds into digital assets, including USDC, PAXG, Bitcoin, and Ethereum, and promised users a fixed annual percentage return. Upon withdrawal, Block Earner converted the cryptocurrency back to Australian dollars.
ASIC launched civil proceedings against the company in November 2022, alleging the offering was a financial product operated without an Australian financial services license. While a Federal Court trial judge initially ruled in favor of ASIC, the Full Court of the Federal Court overturned that decision in April 2025 following a cross-appeal from Block Earner. ASIC then sought special leave to take the matter to the High Court.
After hearing arguments, the High Court panel unanimously rejected the Full Court’s previous finding, finding that it was sufficient that investors’ funds were used to generate a return for both the investor and the issuer. The panel said “any assertion otherwise would ignore the commercial reality of such a financial investment.”
A Warning to Fintech Companies
The High Court also accepted ASIC’s argument that the service operated as a derivative because the final return amount varied depending on changes in cryptocurrency values and exchange rates. He added that the regulatory framework is deliberately broad and adaptable, focusing heavily on the underlying agreements and contractual substance of the product rather than how it was marketed or labeled.
ASIC Deputy Chair Sarah Court welcomed the decision, highlighting its important role in clarifying the boundaries of the current financial services regime.
“This reinforces ASIC’s long-standing position that the definition of a financial product is broad and technology neutral and therefore encompasses new and emerging products without the need for legislative change,” Court said in a statement.
“Companies offering products that provide a return to consumers or involve the conversion of assets should carefully consider whether their offerings are financial products and, if so, ensure they have appropriate licensing or authorization before distributing them,” she said.
The decision comes at a time of rapid regulatory transition for the Australian digital assets sector. Parliament passed the Corporations (Digital Assets Framework) Amendment Act 2026 in April, and ASIC has already set out an 18-month roadmap to implement the new laws before they come into force in April 2027.
However, the Block Earner dispute is not yet fully resolved. The matter will be remitted to the Full Court of the Federal Court so that ASIC can pursue its appeal against a lower court’s earlier penalty judgment, which exempted Block Earner from paying a fine.
