An Australian court rules in favor of Finder Wallet in lawsuit brought by financial watchdog
An Australian court has dismissed a lawsuit brought by the country’s financial watchdog, the Australian Securities and Investment Commission (ASIC), against Finder Wallet, ruling in favor of the crypto firm. The court stated that ASIC failed to establish that Finder Wallet’s product, Finder Earn, was a debenture within the meaning of the Corporations Act. The court also ordered ASIC to pay the defendant’s costs.
Court dismisses ASIC’s claims against Finder Wallet
The court ruling on Thursday dismissed ASIC’s claims against Finder Wallet, stating that the regulator failed to prove that Finder Earn qualified as a debenture under the Corporations Act. This is seen as a significant win for Finder Wallet, as it confirms that the company was compliant with regulatory obligations in offering its product to customers.
Background of the lawsuit
In December 2022, ASIC filed a lawsuit against Finder Wallet, accusing the company of unlicensed conduct and inadequate risk disclosure. The regulator alleged that Finder Earn closely resembled a debenture and was offered to consumers between late February 2022 and November 2022. ASIC claimed that Finder Wallet did not have the appropriate license or authorization to offer this product, depriving consumers of important consumer protections.
Court orders ASIC to pay defendant’s costs
The court document states that ASIC has been ordered to pay the defendant’s costs. This is a significant outcome for Finder Wallet, as it not only dismisses ASIC’s claims but also shifts the financial burden of legal fees onto the regulator.
Finder Wallet’s response to the ruling
Frank Restuccia, global CEO and co-founder of Finder, expressed his satisfaction with the court ruling in a blog post. He stated that the outcome confirms Finder Wallet’s compliance with regulatory obligations in offering Finder Earn to customers. Restuccia also mentioned that the company decided to “sunset” the Earn product in November 2022 and had returned all customer capital.
ASIC’s response and potential appeal
In a statement following the court ruling, ASIC’s executive director for enforcement and compliance, Tim Mullaly, stated that the regulator pursued this matter because it believed that Finder Wallet was offering the Earn product without the appropriate license or authorization. ASIC will carefully consider the judgment and has 28 days to appeal the ruling if it chooses to do so.
Implications of the court ruling
The court ruling in favor of Finder Wallet has several implications:
- Confirmation of compliance: The ruling confirms that Finder Wallet was compliant with regulatory obligations in offering its product, providing assurance to both the company and its customers.
- Legal costs: By ordering ASIC to pay the defendant’s costs, the court has shifted the financial burden onto the regulator. This may serve as a deterrent for ASIC when considering similar legal actions in the future.
- Consumer protection: The court’s decision raises questions about whether Finder Earn truly posed a risk to consumers. This may prompt regulators to reevaluate their stance on similar products and their licensing requirements.
Hot Take: Court ruling strengthens regulatory compliance standards
The court ruling in favor of Finder Wallet sends a strong message about regulatory compliance standards in the cryptocurrency industry. It highlights the importance of ensuring proper licensing and authorization when offering financial products to consumers. The ruling also emphasizes the need for regulators to carefully assess products before taking legal action, as failure to establish wrongdoing can result in significant costs and reputational damage. This case serves as a reminder for both crypto firms and regulators to navigate the evolving landscape of digital assets responsibly.
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