The Australian Securities and Investments Commission (ASIC) has begun civil penalty proceedings against Block Earner (the trading brand of Web3 Ventures Pty Ltd).
The Australian financial market regulator alleged that the company provided unlicensed financial services with its cryptocurrency products and operated an unregistered managed investment scheme.
Block Earner does not hold Australia Financial Services (AFS) license, however, it is a is an AUSTRAC-registered digital currency exchange. The firm offered a range of cryptocurrency-based fixed-yield earning products, such as USD Earner, Gold Earner and Crypto Earner, collectively called the Earner Products.
According the regulator, the Earner Products are financial products and as such they fall under the managed investment scheme and should have been licensed.
ASIC is now seeking declarations, injunctions, and pecuniary penalties.
We are concerned that Block Earner offered financial products without appropriate registration or an Australian Financial Services licence, leaving consumers without important protections. Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law.
ASIC is aware that many consumers are interested in purchasing or investing in crypto-assets. Crypto-assets are risky, inherently volatile and complex and ASIC remains concerned that potential investors in crypto-assets may not fully appreciate the risks involved. ASIC supports the development of an effective regulatory framework covering crypto-assets to protect consumers and investors.
ASIC has previously taken action against other crypto offerings in order to protect investors. Earlier in October, the regulator sought after civil penalty against BPS Financial Pty Ltd over alleged false representation when marketing for crypto asset token Qoin.
The regulator also issued temporarily stopped three Holon crypto funds, saying they were not suited to the wide target market.
ASIC also recently suspended the AFS license of crypto exchange FTX until 23 May 2022 following its collapse.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.