- ASIC seeks High Court clarification on regulation of crypto yield products.
- Federal Court ruled Block Earner’s crypto yield product not a financial product.
- High Court appeal could reshape digital asset regulations in Australia.
Australia’s corporate regulator, ASIC, has requested for the High Court clarification on the legal status of crypto yield products. The appeal comes after the Federal Court ruled in favor of Block Earner and dismissed ASIC’s claims about Block Earner’s decentralized finance (DeFi) product. ASIC aims to obtain a definitive ruling on the classification and regulation of crypto products like Block Earner’s interest-earning offerings.
ASIC’s appeal aims to provide clear classification of interest-earning and asset conversion crypto products. It seeks clarification on whether these products which earn returns through digital assets, should be considered financial products. In April 2024, the High Court dismissed ASIC’s previous effort to take part in the case, but the regulator now seeks further clarification.
Federal Court Favours Block Earner’s “Earner”
ASIC’s application comes after the Full Federal Court’s April 2025 decision overturned ASIC’s claims against Block Earner’s “Earner” product. According to the ruling, the product does not meet the qualification for financial product under current laws. The ruling raised questions about the use of financial regulations on crypto products.
The Coinbase-backed fintech company, Block Earner, offers yield-bearing digital asset products. The company states that its services are similar to traditional lending, where customers earn interest on crypto loans. The firm insists that its products do not pool funds or expose investors to risks which exempts it from a financial product classification.
However, ASIC believes that such products should come under the same financial services regulations. The regulator believes the current laws are general, independent of technology and should cover digital asset services. ASIC seeks a clear legal definition to protect consumers and promote integrity of the market.
Crypto Regulation in Australia
The case has drawn attention beyond the digital asset sector. It raises critical questions about how new financial technologies should be treated under Australia’s financial regulations. The High Court’s decision could set a precedent in digital asset regulation.
Block Earner has discontinued the “Earner” product and has no plans to relaunch it. The company commits to comply with Australian financial laws.
The legal battle demonstrates difficulties in the regulation of decentralized finance because these products often mix conventional financial services with crypto.
As of now, the High Court has not set a date to hear ASIC’s appeal. ASIC and Block Earner has vowed to pursue legal measures to resolve the case. This case could have a major impact on crypto regulations in Australia.
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