The Federal Court of Australia has found that Block Earner (the company name for Web3 Ventures Pty Ltd) offered its ‘Earner’ cryptocurrency lending product without obtaining the appropriate Australian Financial Services License.
However, the court also found that the firm can continue to offer its ‘Access’ product, which wrapped DeFi yields from AAVE and Compound, because the Australian Securities & Investment Commission failed to adequately prove its case.
Shuttered in November 2022, Earner was a straightforward crypto lending product via which user deposits were converted to cryptocurrency and then directed to third-party firms. These firms would then deploy the funds to earn the yields.
Block Earner specifically lent to Stablehouse and XBTO Strategies Limited. Stablehouse is advised by Tether’s former chief strategy officer Phil Potter, and the firm is meant to act as a “clearinghouse for stablecoins.”
Read more: Australian political parties received donations from Finder
The Access product offered by Block Earner didn’t lend to third-party firms but instead focused on deploying the funds directly into DeFi. The court found that this product did not meet the requirements to be a derivative or a managed investment scheme, and Block Earner will be able to continue offering this product. Block Earner notes in this press release that “the case provides guidance for other crypto businesses seeking to comply with the Australian financial services regulatory landscape.”
Australian regulators have actively been suing other cryptocurrency lenders in Australia, including Finder Wallet. Finder Wallet similarly accepted deposits, combined them, and then lent them to third parties to earn the yield.
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Source: https://protos.com/australian-court-slaps-down-lender-who-lent-to-tether-founder/