ASIC Appeals Court Ruling Over Finder Wallet’s ‘Earn’ Product; Firm Has No Relaunch Plans
Summary:
The Australian Securities and Investments Commission (ASIC) has appealed a court decision in favor of Finder Wallet, a subsidiary of Australian fintech company Finder.com, asserting the firm's "Earn" product operated without suitable authorization. The product, offered between February and November 2022, enabled users to convert Australian dollars into a stablecoin, TrueAUD (TAUD), for an interest return. The appeal hearing by the Full Federal Court is expected to take place on an as-yet-undetermined date. Despite the previous court victory, Finder has no plans to reintroduce the Earn product.
An appeal has been lodged by the Australian Securities and Investments Commission (ASIC) following its loss in court against Finder Wallet, an associate of Aussie fintech business Finder.com. The federal court ruled last month that the "Earn" solution of Finder Wallet was in accordance with Australian financial legislation. ASIC alleged earlier, however, that the interest-bearing product of Finder Wallet was not licensed or authorised correctly. Judge Brigitte Markovic of the federal court dismissed the lawsuit on March 14, determining that ASIC couldn't establish the Earn product as a "debenture" — an interest-bearing debt obligation under the Corporations Act — presented by Finder Wallet.
In a filing on April 10, ASIC contested Judge Markovic's judgement, stating there was no deposit or lending to Finder Wallet when customers used the Earn product. Moreover, ASIC contended that Finder Wallet made no commitments to repay the money as a debt. According to a separate statement from ASIC on April 10, it appealed the decision due to concerns that the Finder Earn product was being offered without the needed license or authorisation, and therefore lacking vital customer protections.
A date for the appeal hearing by the Full Federal Court has yet to be set. This court hears appeals on matters of significant magnitude from the Federal Court and is the second highest court, below the High Court of Australia. Finder has been approached by Cointelegraph for their comment on the matter.
The Finder Earn product, which was available from February to November 2022, allowed users to convert Australian dollars into a stablecoin linked to the Australian dollar, TrueAUD (TAUD). This could then be moved to Finder Wallet in exchange for a yield of 4-6%. A lawsuit was filed against Finder Wallet by ASIC in December 2022, claiming it was an unlicensed financial product.
ASIC further alleged that Finder Wallet chose to "sunset" the product a month prior because the firm had been informed of ASIC's concerns. Though, a spokesperson denied these claims in a statement to Cointelegraph at the time, citing the decision was strategic in nature due to increased interest rates and not due to regulatory scrutiny.
According to a spokesperson from Finder, despite the court victory, the firm currently has no plans to reintroduce the Finder Earn product, as relayed to Cointelegraph last month.
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Published At
4/11/2024 3:00:37 AM
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