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The CEO of fintech firm Block Earner has slammed the ‘lack of clarity’ in Australia’s financial licensing regime after his firm was sued by the country’s financial services regulator for providing unlicensed crypto investment products .

The Australian Securities and Investments Commission (ASIC) announcement on November 23 local time that it filed a civil suit against the company because it offered three crypto-related fixed-income products without an Australian Financial Services (AFS) license.

ASIC said the products should have been licensed because they were “managed investment schemes” where investors contribute money that is pooled for an interest in the scheme.

The products, named “Crypto Earner”, “USD Earner” and “Gold Earner”, offered returns through users depositing Australian dollars which would be converted into Bitcoin (BTC), Ether (ETH), USD coin (USDC) or PAX Gold (PAXG) depending on the product according to Block Earner’s website.

The crypto-assets are then lent to borrowers on Decentralized Finance (Challenge) Aave protocols (AAV) and compound financing (COMP) to generate yield for the product.

ASIC Vice President Sarah Court expressed concern that Block Earner was offering the products without “proper registration” or an AFS license which she said left “consumers without important protections”, adding :

“Just because a product is based on a crypto-asset doesn’t mean it doesn’t fall under financial services law.”

In an emailed statement to Cointelegraph Block Earner CEO and Co-Founder Charlie Karaboga, said that while the company “[understands] the backdrop”, it was a “disappointing result”.

He said he welcomes the regulations, saying the company “has spent considerable resources building a regulatory infrastructure” to be able to offer services “under existing guidelines provided by ASIC.”

Related: FTX Australia license suspended as 30,000 Aussies left behind

Karaboga targeted the unclear regulatory environment for crypto in the country and said the “lack of clarity […] creates friction between regulators and innovators,” adding:

“In an ideal world, we would build these products in a regulatory sandbox with more clarity around licensing regimes. Going forward, we look forward to working with ASIC and other regulators in this area. »

According to Karaboga, Block Earner had applied for a credit license and informed ASIC that it would apply for an AFS license for its upcoming products because “the license requirements are clear”.

ASIC previously warned crypto-asset providers in the country after it taken action against the creators of the Qoin token.

It said its “key priority” was “unlicensed conduct and deceptive promotion of crypto-asset financial products” after alleging that Qoin token creators had “deceived” its users.