Finder.com sued by Australian regulator over its crypto yield product
ASIC claimed a crypto yield-bearing product from Finderâs registered exchange was unlicensed, the firm disagreed but refused to say if it would fight the suit.
Financial product comparison website Finder.com is being sued by Australiaâs financial services regulator for allegedly offering a cryptocurrency yield-bearing product without the required license.
Itâs the second local provider of a crypto yield product to be targeted by the regulator, following action against Block Earner in November
The Australian Securities and Investments Commission (ASIC) began court proceedings on Dec.15 local time against Finder.comâs subsidiary and locally registered digital currency exchange Finder Wallet.
ASIC alleged the Finder Earn product was an unlicensed financial product and that theFinder Wallet breached product disclosure requirements and failed to comply with obligations pertaining to distributing financial products in a targeted manner.
Finder Earn offered users an annual yield of between 4.01% and 6.01% for depositing the Australian dollar-pegged stablecoin True AUD (TAUD).
ASIC claimed the product was a debenture â a debt instrument unbacked by collateral â which required an Australian Financial Services (AFS) license.
It claimed that Finder Earn âexposed consumers to potential harmâ as they may have been offered a product ânot suitable for them.â Finder disagrees with this assessmen.
âWe do not share ASICâs view that Finder Earn can be regarded as a debenture,â a Finder.com spokesperson told Cointelegraph.
âSince Finder Earn was launched in November 2021, we have proactively engaged with ASIC and have cooperated fully with all ASIC requests for information.â
Finder Earn was âsunsetâ on Nov. 24 which ASIC claimed was due to it notifying Finder Wallet of its concerns.
The Finder.com spokesperson claimed the decision to discontinue the product âwas a strategic business decisionâ due to increased interest rates and ânot brought on by regulatory review.â
âWe were in the process of this sunset when we were notified [ASIC] might take a closer look,â they added.
Both ASIC and Finder.comâs spokesperson said all user funds were fully returned following the termination of Finder Earn.
Finder said it âwill not be commenting further as this matter is now before the courtsâ when questioned if it would contest the suit.
Sarah Court, ASICâs deputy chair, said in the announcement that its âmessage to industry is clear â just because an offer involves a crypto-asset related product does not guarantee it will fall outside the current regulatory regime.â
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ASICâs suit against Finder.com marks its third action in as many months against crypto financial products and the firms who provided them.
In November ASIC sued fintech firm Block Earner for similarly offering three crypto-backed fixed-yield earning products without an AFS license. In response to the suit Block Earnerâs CEO lashed out at the âlack of clarityâ in the countryâs financial licensing regime.
Financial services firm BPS Financial was sued by the regulator in October for âunlicensed conductâ related to its âQoinâ token, with alleged âmisleadingâ representations that Qoin was regulated in Australia.
ASIC chair, Joe Longo, previously warned that âaction will be takenâ on firms who promote what he called âhigh-risk and nicheâ crypto investment products.