Australia’s High Court has delivered a major victory for the Australian Securities and Investments Commission (ASIC), unanimously ruling that crypto platform Block Earner’s former yield-generating Earner product was a regulated financial product that required licensing under Australia’s financial services laws.
According to the court document posted on June 17, the High Court allowed ASIC’s appeal and overturned a 2025 Full Federal Court decision that had sided with Block Earner. The ruling is expected to become one of the most important legal precedents for Australia’s digital asset sector, confirming that existing financial services laws can apply to crypto investment products without the need for new legislation.
High Court reverses earlier federal court victory
The dispute centered on Block Earner’s “Earner” product, which operated between March and November 2022. The case, formally ASIC v Web3 Ventures Pty Ltd, was decided by a full bench of seven justices in a 7-0 ruling.
Under the offering, customers deposited Australian dollars, selected a cryptocurrency, and received a fixed annual percentage yield (APY) paid in digital assets. Block Earner then deployed those funds within its broader crypto lending operations.
ASIC argued that the product constituted a financial product and was offered without the required Australian Financial Services Licence (AFSL).
The High Court agreed.
“The Earner Product was a financial product,” the judges concluded, finding that it operated as “a facility through which a person made a financial investment” under the Corporations Act.
The decision caps a saga that ran through three levels of the federal court system. ASIC first succeeded at trial in 2024, but Block Earner was later relieved of any penalty that year, and the Full Federal Court reversed the core finding in April 2025, a ruling widely seen as a blow to the regulator, before the High Court restored it.
Court finds users were making financial investments
A central question before the court was whether customers were merely lending assets to Block Earner or making a financial investment. The judges rejected Block Earner’s argument that the arrangement resembled a traditional loan relationship.
According to the judgment, customers contributed Australian dollars in exchange for a promised return, while Block Earner used those funds as part of its lending business to generate profits and meet its obligations to investors.
“The user contributed AUD in return for the APY, and the Block Earner took the AUD in return for the obligation to pay the user the APY,” the court stated. The judges further found that Block Earner used, and intended to use, customer contributions to generate returns for investors while simultaneously earning profits for itself.
Importantly, the court dismissed suggestions that users were lending cryptocurrency to the company, noting that customers never held rights or title to the digital assets used within Block Earner’s operations.
Earner product also qualified as a derivative
Beyond finding that the Earner product constituted a financial investment, the High Court also ruled that it met Australia’s legal definition of a derivative.
The judges noted that the amount returned to customers ultimately depended on cryptocurrency valuations and exchange-rate movements.
“The amount of AUD a user was entitled to receive back was to depend upon the market value of the Eligible Cryptocurrency in USD and the exchange rate of USD for AUD,” the judgment stated. Because the value returned to investors varied according to external market variables, the product satisfied the Corporations Act’s derivative provisions.
Major win for ASIC’s crypto enforcement strategy
The ruling represents a significant victory for ASIC, which has increasingly argued that many crypto products can already be regulated under existing Australian financial services laws. ASIC Chair Sarah Court welcomed the decision, saying it clarifies when products that provide a return “fall within the existing financial services regulatory regime” and reinforces that the definition of a financial product is “broad and technology neutral,” capturing emerging products without amending the law.
By finding that Block Earner’s product fell within those rules, the judgment reinforces ASIC’s ability to pursue enforcement actions against crypto businesses that offer investment-like products without appropriate licensing, part of a broader Australian push to bring digital asset platforms under licensing requirements.
Penalty battle still ahead
While ASIC secured a decisive legal victory on the central issues, the litigation is not yet over. The High Court ordered that the matter be returned to the Full Federal Court for determination of ASIC’s appeal concerning penalties arising from earlier proceedings after Block Earner was relieved of a penalty in 2024.
As for costs, ASIC will pay Block Earner’s costs of the High Court proceedings — but that was a condition agreed when the regulator was granted special leave to appeal in August 2025, a common arrangement when a regulator pursues a test case against a smaller party, rather than any reflection of the outcome.
The outcome means the final financial consequences for Block Earner will be determined in future proceedings.
Major implications for Australia’s crypto industry
The judgment is expected to have far-reaching implications for crypto exchanges, lending platforms, yield-generating products, and other digital asset investment services operating in Australia.
By confirming that a crypto yield product can qualify as both a financial investment and a derivative, the High Court has strengthened ASIC’s ability to regulate digital asset businesses under existing legislation.
The ruling also signals that courts will examine how crypto products function in practice rather than relying on industry terminology or marketing labels.
Block Earner played down the immediate impact, noting the ruling concerns a legacy product. Co-founder and CEO Charlie Karaboga said the company would “continue to engage constructively with ASIC,” but called it “unfortunate” that such questions had been “tested through enforcement against a small, innovative Australian startup.” The firm voluntarily closed Earner in November 2022 and exited yield products and, in May 2026, became the first digital asset platform in Australia to secure an Australian Credit License, under which it now offers Bitcoin-backed home loans. The case produced no finding of customer loss, dishonesty, or misconduct.
As Australia continues developing its broader digital asset regulatory framework, the Block Earner decision is likely to serve as a cornerstone precedent for future enforcement actions, licensing requirements, and compliance standards across the country’s crypto sector.
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