The Federal Court of Australia has dismissed proceedings brought by the corporate regulator, Australian Securities and Investments Commission (ASIC), against Finder Wallet, holding that a financial services licence was not required in respect of its former cryptocurrency offering, Finder Earn. The case is the first decision in Australia which has considered whether a cryptocurrency product falls within the definition of a “debenture” for the purposes of the Corporations Act 2001 (Cth), and is the most recent authoritative consideration of the scope of the “debenture” definition contained in that Act.
Greg O’Mahoney, led by Nicholas Owens SC, appeared successfully for the defendant, Finder Wallet, in Australian Securities and Investments Commission v Finder Wallet Pty Ltd [2024] FCA 228. They were instructed by Tim Dixon, Sarah Archer, and Jesse Vermiglio at Holley Nethercote Lawyers.
The proceedings involved an allegation by ASIC that Finder Wallet, a registered cryptocurrency exchange and subsidiary of Finder.com, had breached the Corporations Act by offering its former cryptocurrency-related product, Finder Earn, without holding an Australian Financial Services License (AFSL). The sole issue in the case was whether Finder Earn was a “debenture” for the purposes of the Corporations Act. Justice Markovic dismissed ASIC’s allegations, finding that Finder Earn was not a debenture.
The Court’s decision is likely to impact the assessment of the regulatory compliance of similar cryptocurrency products in the future.
Links
A copy of the decision can be found here: https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0228
Access to an article from the AFR discussing the case can be found here. Other articles addressing it include:
