The Federal Court of Australia has overturned a previous ruling that required the company to hold a financial services license for one of its now-discontinued crypto products.

The court found that Block Earner’s fixed-yield crypto offering doesn't qualify as a financial product, managed investment scheme, or derivative under the Corporations Act. The decision, said on April 22 by Justices David O’Callaghan, Wendy Abraham, and Catherine Button, clarifies that users were essentially lending their crypto on fixed terms for interest, rather than making pooled investments.

Because users had no exposure to Block Earner’s broader business operations and only received returns based on a fixed rate, the judges concluded it was more akin to a loan agreement than an investment product.

Source: ASIC

As a result, the court dismissed the legal action brought by the Australian Securities and Investments Commission (ASIC) and ordered the regulator to cover all legal costs associated with the proceedings, including the appeal.

ASIC acknowledged the ruling in a press release on April 22, stating it is currently "considering this decision."

The Full Federal Court has ruled in favor of Block Earner, not only affirming their position but also ordering ASIC to cover their legal costs for the entire case, including the appeals. This landmark decision is a significant win for the crypto platform and could serve as a major reference for future legal discussions and regulatory changes around digital assets in Australia.

With roughly four million Australians involved in cryptocurrencies, this ruling provides much-needed clarity on how Australia’s financial services laws apply to crypto products. It marks a critical moment in the ongoing challenge of integrating traditional finance law with the rapidly evolving digital asset landscape..