Seeking Regulatory Clarity, Australian Fintech Launches Loans Backed by Bitcoin

Seeking Regulatory Clarity, Australian Fintech Launches Loans Backed by Bitcoin


Australian fintech company Block Earner is moving forward with its intends to launch a crypto-backed loans product, regardless of facing a court date with the financial regulator for allegedly offering financial products without a license. The new product will allow Australian cryptocurrency investors to use their cryptocurrency 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 (BTC) as collateral at the beginning. 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. Regardless of 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 regulations. Karaboga hopes that quicker regulatory progress in other jurisdictions will pressure the Australian Government to provide more clarity. He believes that domestic regulators are supportive of cryptocurrency and want to promote   innovation. The court hearing for Block Earner is scheduled for November, with a decision expected in January.

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