ASIC deputy chair Sarah Court said the civil proceeding was the regulator’s third recent action against a firm offering a “crypto-asset related product” considered to be a financial product, including action against fintech company Block Earner for allegedly providing unlicensed financial services, and BPS Financial for allegedly issuing misleading statements regarding its crypto-asset, Qoin.
“Our message to industry is clear – just because an offer involves a crypto-asset related product does not guarantee it will fall outside the current regulatory regime,” she said.
ASIC also alleged that Finder Wallet did not hold an Australian financial services licence – a requirement for businesses providing financial product advice or dealing in financial products – when offering Finder Earn, thus potentially placing their customers in harm’s way, such as by offering them a product that was not suitable for them.
A Finder spokesperson said the company has “proactively engaged” with ASIC and cooperated fully with all requests for information. However, the firm will defend the proceedings.
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“We do not share ASIC’s view that Finder Earn can be regarded as a debenture,” said a Finder spokesperson. “An innovative product, Finder Earn offered customers a way to earn yield on their crypto. All customers’ capital was returned in full and the product was sunset last month.”
ASIC is seeking pecuniary penalties – monetary fines imposed and collected by civil courts – and declarations from the court. The date for the first hearing has not yet been scheduled.
The Australian Financial Review reported that Finder held $17.3 million in member holdings and $2.2 million in “digital asset member holdings”, according to corporate filings from June this year. It also reported that the company claimed to have paid about $500,000 to Finder Earn customers before the crypto product’s closure.
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