High Court rules against Block Earner in win for ASIC
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The news: The High Court has ruled that Block Earner’s now-closed Earner product was a financial product and therefore required the fintech to hold an Australian Financial Services Licence (AFSL), overturning a decision made by the full Federal Court.
The case was brought by corporate regulator ASIC and the matter will be returned to the Federal Court to determine whether Block Earner should pay a penalty.
The context: Earner was a fixed-yield product in which users could exchange Australian dollars for a nominated cryptocurrency. The funds were pooled by Block Earner and loaned to what it called “trusted partners”.
The High Court judgment found that “the Earner Product involved the respondent using an investor’s contribution to generate a financial return for the investor, as well as to generate a profit for itself”.
It also found that the Earner Product was a derivative under the Corporations Act because the final payment to the user was “derived from or varied by reference to the exchange rate between AUD and the eligible cryptocurrency”.
The Federal Court previously ruled in April 2025 that Block Earner did not need an AFSL to issue the Earner Product because it did not consider it a financial product.
Separately, Block Earner became the first digital asset platform to be granted an Australian Credit Licence in May 2026. The High Court ruling does not relate to this.
What they said: “We acknowledge the High Court’s decision and will continue to engage constructively with ASIC and the regulatory process. However, it is important to highlight that this proceeding concerns a product that was voluntarily closed in 2022,” Block Earner CEO and co-founder Charlie Karaboga said.
“We continue to believe that legal clarity for Australia’s digital asset sector should come through proper legislative reform, not retrospective litigation.
“It is unfortunate that such significant questions about the application of financial services law to digital assets have had to be tested through enforcement against a small, innovative Australian startup.”
The sources: Block Earner media release, High Court Judgment
