Australia’s financial watchdog is challenging its defeat in the Finder Wallet case.

Estimated read time 2 min read

The Australian Securities and Investments Commission (ASIC) is appealing a recent court ruling that deemed Finder Wallet’s “Earn” feature, a product of the Australian fintech company, in line with Australia’s financial regulations. Last month, a federal court found that the product complied with the country’s financial laws.

ASIC had initially contended that Finder Wallet’s interest-earning product was operating without the necessary licenses or approvals. However, Federal Court Justice Brigitte Markovic dismissed these claims on March 14, stating ASIC couldn’t prove that the Earn product was a “debenture” – a type of debt instrument where a company agrees to repay borrowed money with interest – according to the Corporations Act.

In an appeal filed on April 10, ASIC claimed Justice Markovic made a mistake in her decision, arguing that using the Finder Earn product didn’t involve depositing money into or lending money to Finder Wallet.

Moreover, ASIC stated, “Finder Wallet did not commit to repaying money as a debt.”

“ASIC has decided to appeal this verdict due to concerns that the Finder Earn product was offered without the requisite licensing or approval, thus lacking crucial consumer protections,” ASIC expressed in a statement on April 10.

The Full Federal Court, which reviews appeals from the Federal Court on significant issues, has yet to schedule a date for this appeal.

Responding to ASIC’s appeal, a Finder spokesperson expressed disappointment over the regulator’s refusal to accept the Federal Court’s decision. Nonetheless, the company is ready to defend its product vigorously in the Full Federal Court.

The Finder Earn product, available from February to November 2022, allowed users to convert Australian dollars into TrueAUD (TAUD), a stablecoin pegged to the Australian dollar. This could then be deposited into Finder Wallet in exchange for a yield of 4-6%.

ASIC launched a lawsuit against Finder Wallet in December 2022, labeling it as an unlicensed financial product. The regulator also suggested that Finder Wallet discontinued the product due to regulatory concerns, although a company spokesperson attributed the decision to strategic business considerations and not regulatory scrutiny.

Despite the legal victory, Finder has stated it does not plan to relaunch the Finder Earn product.

You May Also Like

More From Author

+ There are no comments

Add yours