The Australian Securities and Investments Commission (ASIC) has filed to appeal its court loss against Finder Wallet, a sister company of Australian fintech firm Finder.com, over its “Earn” product which was found to be compliant with Australia’s financial laws by a federal court last month.
ASIC previously argued that Finder Wallet’s yield-bearing product operated without an appropriate license or authorization. But Federal Court Justice Brigitte Markovic dismissed the case on March 14, ruling ASIC failed to establish that Finder Wallet’s Earn product constituted a “debenture” — a debt security where companies promise to pay back borrowed money with interest — under the Corporations Act.
In the April 10 filing, ASIC argued Justice Markovic “erred” in this finding because there was no depositing of money or a loan to Finder Wallet when an investor used the Finder Earn product.
Additionally, “there was no undertaking by Finder Wallet to repay money as a debt,” the securities regulator argued.
“ASIC has appealed this decision because it is concerned that the Finder Earn product was offered without the appropriate license or authorization and therefore without the benefit of important consumer protections,” ASIC argued in a separate statement on April 10.
The appeal will be heard by the Full Federal Court on a date to be determined. The court hears appeals from the Federal Court on matters of “sufficient importance.” It is the second highest court behin the High Court of Australia.
A Finder spokesperson told Cointelegraph the firm is “disappointed” with ASIC’s decision not to accept the Federal Court ruling but is prepared to diligently defend its product in the Full Federal Court.
Offered between February and November 2022, users of the Finder Earn product could convert Australian dollars into TrueAUD (TAUD) — a stablecoin pegged to the Australian dollar, which could then be transferred to Finder Wallet in exchange for receiving a yield between 4-6%.
ASIC filed the lawsuit against Finder Wallet in December 2022, arguing it was an unlicensed financial product.
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ASIC also claimed Finder Wallet "sunset" the product one month earlier because it notified the firm of its concerns. However, a spokesperson told Cointelegraph at the time that it was “a strategic business decision” due to increased interest rates and “not brought on by regulatory review.”
Last month, a Finder spokesperson told Cointelegraph the firm doesn’t have any intention to relaunch Finder Earn despite the court victory.
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