ASIC claims Finder’s registered exchange’s crypto yield-bearing product was unlicensed; the company disagrees but has declined to say whether it will fight the suit.
The Australian Financial Services Commission is suing financial product comparison website Finder.com for allegedly offering a cryptocurrency yield-bearing product without the necessary license.
Following the action against Block Earner in November, it is the second local provider of a crypto yield product to be targeted by the regulator.
On December 15, the Australian Securities and Investments Commission (ASIC) filed a lawsuit against Finder.com’s subsidiary, Finder Wallet, a locally registered digital currency exchange.
ASIC claimed that the Finder Earn product was an unlicensed financial product and that Finder Wallet violated product disclosure requirements as well as obligations related to targeted financial product distribution.
For depositing the Australian dollar-pegged stablecoin True AUD, Finder Earn offered users an annual yield of between 4.01% and 6.01%. (TAUD).
According to ASIC, the product was a debenture, which is a debt instrument that is not backed by collateral and requires an Australian Financial Services (AFS) license.
It claimed that Finder Earn “exposed consumers to potential harm” by offering them a product “unsuitable for them.” This assessment is not shared by Finder.
“We do not agree with ASIC’s assessment that Finder Earn is a debenture,” a Finder.com spokesperson told Cointelegraph.
“Since the launch of Finder Earn in November 2021, we have actively engaged with ASIC and have fully cooperated with all ASIC requests for information.”
On November 24, Finder Earn “sunset,” which ASIC claimed was due to it notifying Finder Wallet of its concerns.
According to a Finder.com spokesperson, the decision to discontinue the product was “a strategic business decision” prompted by rising interest rates and was “not prompted by regulatory review.”
“We were in the midst of this sunset when we were informed that [ASIC] might take a closer look,” they added.
Following the termination of Finder Earn, both ASIC and a spokesperson for Finder.com stated that all user funds were fully returned.
Finder said it “will not be commenting further as this matter is now before the courts” when questioned if it would contest the suit.
Sarah Court, ASIC’s deputy chair, said in the announcement that its “message to industry is clear — just because an offer involves a crypto-asset related product does not guarantee it will fall outside the current regulatory regime.”
