The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings against fintech Block Earner as it alleges it operated an unregistered managed investment scheme.
Block Earner offered a range of fixed-yield earning products based on crypto-assets under the names USD Earner, Gold Earner and Crypto Earner (collectively known as the Earner Products).
ASIC alleged that the Earner Products were financial products that should have been licensed because the products were a managed investment scheme, a facility through which a person makes a financial investment, and/or a derivative.
In the Budget earlier this year, it was noted the Government committed to a review of managed investment schemes as investors were seeing losses and scheme collapses.
ASIC deputy chair, Sarah Court, said: “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 was seeking declarations, injunctions, and pecuniary penalties from the Court.
The date for the first case management hearing was yet to be scheduled by the Court.
Yet another ASIC action funded in full by all licensed advisers, which if any penalty is successful will be forwarded onto consolidated revenue for the government. Can someone please explain how this is fair?
Seems fair to me that financial advisers should fund this ASIC enforcement action via the levy, not only against a product provider but one that didn’t have a licence. Planners should pay!!!
It is simple.
Business creates an investment facility/product/vehicle whereby it promotes investment in that product.
The investors tipping money in would be right to assume the financial product has been approved and registered before committing funds.
The asset definition… whether it be crypto, trees, emu eggs or anything else should never be the reason why any of these vehicles should not be heavily scrutinsed prior to approval and subsequently registered.
You build a product, ask and encourage people to invest……this is a financial product…full stop.
It is simple.
Business creates an investment facility/product/vehicle whereby it promotes investment in that product.
The investors tipping money in would be right to assume the financial product has been approved and registered before committing funds.
The asset definition… whether it be crypto, trees, emu eggs or anything else should never be the reason why any of these vehicles should not be heavily scrutinsed prior to approval and subsequently registered.
You build a product, ask and encourage people to invest……this is a financial product…full stop.