Australian fintech company Block Earner is moving forward with its plans to launch a crypto-backed loans product, despite facing a court date with the financial regulator for allegedly offering financial products without a license. The new product will allow Australian crypto investors to use their crypto holdings as collateral to borrow cash. This is similar to the services offered by SALT, a lending platform based in Colorado, and the now-closed service provided by Coinbase. Block Earner’s initial rollout is set for the end of September and will only accept Bitcoin as collateral initially.
Block Earner had previously faced legal action from the Australian Securities and Investments Commission (ASIC) for offering crypto-linked fixed-yield earning products without the necessary license. The company’s CEO, Karaboga, criticized ASIC for lacking clarity in its regulations. Despite the legal action, Block Earner closed its “earn” products and reimbursed its users. The company’s head of business, James Coombes, stated that the new launch complies with Australian credit license rules. Karaboga hopes that faster regulatory progress in other jurisdictions will pressure the Australian government to provide more clarity. He believes that domestic regulators are supportive of crypto and want to encourage innovation. The court hearing for Block Earner is scheduled for November, with a decision expected in January.
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