The Australian Securities and Investments Commission (ASIC) has filed an appeal against its court loss in a case involving Finder Wallet, a sister company of Australian fintech firm Finder.com. Last month, a federal court ruled that Finder Wallet’s “Earn” product complied with Australia’s financial laws.
ASIC had previously argued that Finder Wallet’s yield-bearing product, Earn, operated without the appropriate license or authorization. However, the court dismissed ASIC’s case on March 14, stating that ASIC failed to establish that the Earn product constituted a “debenture” under the Corporations Act.
In its filing on April 10, ASIC argued that the court erred in its finding because there was no depositing of money or loan to Finder Wallet when investors used the Earn product. ASIC contends that Finder Wallet offered the product without the necessary license or authorization, thereby lacking important consumer protections.
The appeal will be heard by the Full Federal Court at a date to be determined. The Full Federal Court hears appeals from the Federal Court on matters of significant importance.
A spokesperson for Finder expressed disappointment with ASIC’s decision not to accept the Federal Court ruling but stated that the company is prepared to defend its product in the Full Federal Court.
The Earn product, offered between February and November 2022, allowed users to convert Australian dollars into TrueAUD (TAUD), a stablecoin pegged to the Australian dollar. Users could then transfer TAUD to Finder Wallet and earn a yield between 4-6%.
ASIC filed the lawsuit against Finder Wallet in December 2022, alleging that the product was an unlicensed financial product. ASIC also claimed that Finder Wallet ceased offering the product one month earlier due to increased interest rates and not because of regulatory review.
Despite the court victory, Finder has stated that it does not intend to relaunch the Earn product.
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