TLDR
- The Federal Court ruled that Finder Earn is not a financial product under Australian law.
- The court dismissed ASIC’s appeal against Finder after a three-year legal dispute.
- The court found that TrueAUD is property and not money, which excludes it from being a debenture.
- Customers using Finder Wallet did not make loans or deposits, according to the court’s analysis.
- The court upheld that Finder Earn complied with financial regulations during its operation from February to November 2022.
Australia-based fintech company Finder has secured a court victory against the Australian Securities and Investments Commission (ASIC). The Federal Court dismissed ASIC’s appeal concerning the regulatory status of Finder’s crypto yield product, Finder Earn. This ruling upholds a previous decision that the product did not breach Australia’s financial laws.
The court’s decision ends a three-year legal battle over the classification of Finder Earn. Judges Stewart, Cheeseman, and Meagher confirmed that the product does not constitute a financial product. The judgment reinforces that Finder Wallet operated within legal boundaries during the period the product was available.
Finder Earn offered customers a fixed yield by converting Australian dollars into a stablecoin, TrueAUD. Customers could then allocate the stablecoin to the Finder Wallet platform. The court ruled that this process did not involve lending money or depositing funds under the Corporations Act 2001.
Finder Earn Product Deemed Compliant With Financial Laws
According to the court’s decision, Finder operated its crypto yield product from February to November 2022 without breaching regulatory standards. Customers could earn returns ranging from 4% to 6% by allocating TrueAUD through the Finder Wallet. However, the product did not involve a traditional money loan or financial promise under current laws.
ASIC argued that the product functioned like a debenture, but the court rejected that interpretation. It stated that TrueAUD is a type of property and not considered legal tender or money. Therefore, customers were not entering into a loan agreement by using Finder Earn.
The court also noted that customers had multiple options within the Finder Wallet. They could withdraw funds, buy other cryptocurrencies, or use the platform without joining Finder Earn. This flexibility supported the view that the product was not tied to a financial obligation.
Federal Court Concludes Finder’s Arrangement Does Not Involve Money Loans
The Federal Court emphasized that ownership of TrueAUD transferred to Finder Wallet under a contractual agreement. Customers received the right to claim back the same amount with interest, similar to securities lending. This structure did not amount to a deposit or debt obligation.
ASIC claimed the arrangement included a repayment promise, making it a financial product, but the court disagreed. It found no business purpose tied to the supposed loan of money. The ruling confirmed that Finder Earn operated independently of the legal definition of a debenture.
This legal win comes as Australia prepares new crypto regulations. These include measures for licensing, asset protection, and tighter oversight. Regulatory developments continue as authorities pursue other cases, including action against a Blockchain Global executive.
