Australian Federal Court has dismissed a lawsuit brought by the Australian Securities and Investments Commission (ASIC) against Finder Wallet, a subsidiary of the prominent Australian fintech firm Finder.com.
The court found that Finder’s yield-bearing product, Finder Earn, was compliant with financial laws, thereby rejecting ASIC’s claims of regulatory non-compliance.
Court upholds Finder’s compliance
ASIC had alleged that Finder Earn constituted an unlicensed financial product and insisted that Finder Wallet should hold a financial services license. However, Justice Brigitte Markovic, presiding over the case, ruled in favor of Finder, asserting that ASIC failed to establish Finder Earn as a debenture under the Corporations Act.
As a result, the court dismissed ASIC’s legal action, emphasizing that the contraventions alleged by ASIC hinged upon establishing Finder Earn as a debenture, which the court found unsubstantiated.
In response to the court’s decision, Finder expressed satisfaction, deeming it a “landmark win.” However, the company reiterated that its decision to discontinue Finder Earn was not prompted by regulatory scrutiny but rather stemmed from strategic business considerations, particularly amid rising interest rates.
Finder’s future outlook and ASIC’s consideration of appeal
Although there are no immediate plans to relaunch the Earn product, Finder remains open to future possibilities, emphasizing its commitment to compliance with regulatory obligations.
While ASIC expressed its intention to carefully review the judgment, it acknowledged the court’s decision. ASIC has 28 days to contemplate lodging an appeal bid to the Full Federal Court, comprising three judges.
The regulatory body underscored the importance of licensing and authorization for financial products, citing the need for consumer protection. Notably, ASIC’s pursuit of the matter reflects its ongoing vigilance in ensuring compliance within the financial sector.
Significance of the court’s decision for Finder and ASIC
The dismissal of ASIC’s lawsuit against Finder’s Earn product marks a significant victory for the Australian fintech firm. The court’s ruling reaffirms Finder’s adherence to regulatory requirements and underscores the importance of engaging proactively with regulatory authorities.
As the legal landscape surrounding financial products evolves, this case sets a precedent regarding compliance and consumer protection. Both Finder and ASIC are poised to continue their respective roles in shaping the regulatory framework governing the financial sector, with potential implications for future product offerings and regulatory oversight.
This ruling comes in the wake of similar legal battles in the cryptocurrency space, including ASIC’s recent partial win against Block Earner, highlighting the ongoing scrutiny and regulatory challenges faced by firms operating in the digital asset ecosystem.
As Finder celebrates its legal triumph, the broader implications of this case reverberate across Australia’s financial industry, signaling the importance of robust compliance measures and proactive engagement with regulatory authorities.
