In a legal battle that’s been watched closely by Australia’s fintech and crypto communities, the Federal Court has officially sided with Block Earner, a crypto lending platform, in its dispute with the country’s financial regulator, ASIC (Australian Securities and Investments Commission).
This ruling doesn’t just clear Block Earner—it sets a powerful precedent for how crypto products might be treated under existing laws in Australia.
What’s the case really about? Why does it matter? And what does it mean for the future of crypto innovation in the country?
How the Dispute Began
It all started back in November 2022 when ASIC decided to go after Block Earner. The regulator filed a civil lawsuit, claiming that Block Earner was offering a crypto-linked product that functioned like a financial service — but without the required financial services license.
The product in question was a fixed-yield “Earner” offering, which allowed users to lend crypto assets to Block Earner in exchange for steady, agreed-upon interest. Pretty simple, right?
ASIC didn’t think so. They argued that this kind of product should fall under financial services law — something tightly regulated in Australia. If Block Earner wanted to offer this kind of deal, ASIC said, they needed a license, and by not having one, they were breaking the law.
Block Earner Fights Back
Block Earner didn’t agree. They argued that the product wasn’t like a traditional investment or managed scheme. It didn’t promise users a return based on the performance of a fund or a pool. It was more like a crypto loan with a fixed return—straightforward and with no surprises.
Rather than accept the accusations, the company chose to defend itself in court.
The Big Court Decision
On April 22, 2025, the Federal Court delivered its decision: Block Earner was right.
A panel of three judges—Justices David O’Callaghan, Wendy Abraham, and Catherine Button—found that Block Earner’s yield product didn’t qualify as a financial product, a managed investment scheme, or a derivative under the Corporations Act.
In simple terms, Block Earner’s offering was not the kind of thing the current laws were designed to regulate in this way.
The judges explained that Block Earner users loaned their crypto under fixed terms. They didn’t pool their funds or share in any wider investment. They received a fixed interest return, and that was that. Because the terms were clearly defined and users had no stake in the performance of a larger fund, it didn’t fall under ASIC’s regulatory scope.
This wasn’t a high-risk gamble. It was, legally speaking, a loan with a contract, not an investment vehicle.
ASIC Ordered to Cover Legal Costs
As part of the decision, the court didn’t just dismiss ASIC’s case—it went one step further. The judges ordered ASIC to pay Block Earner’s legal costs, including those from the appeal process.
This is significant. It suggests the court saw ASIC’s case as weak or at least unjustified under the law as it stands.
Block Earner Responds: A Win for Common Sense
James Coombes, Block Earner’s chief commercial officer, was understandably relieved and encouraged by the ruling.
In an interview with Cointelegraph, he stressed that the decision brought much-needed clarity to the question of how crypto-based services should be treated under existing law. Just because a product involves crypto, it doesn’t mean it should automatically be treated differently or more harshly than traditional finance products.
“Our product was simply defined as one where customers would lend their assets to us for a fixed return,” he said. “There was no share in the upside of the pool of assets and as such no Managed Investment Scheme existed.”
Coombes also made it clear that this isn’t just about one company’s victory. It’s about setting a precedent for the whole crypto space in Australia. He believes the decision could give other fintech innovators the confidence to build new services, knowing they won’t be unfairly targeted just because they’re working with digital assets.
Why This Case Matters So Much
This isn’t just some boring legal drama. The Block Earner ruling touches on some of the biggest questions in crypto today:
- How should crypto products be classified?
- Do existing financial laws apply to decentralized technologies?
- Where’s the line between innovation and regulation?
By siding with Block Earner, the court has made it clear that it’s willing to look at the substance of a product, not just the technology behind it. If a crypto loan behaves like a normal loan, and not an investment scheme, it shouldn’t be treated as one just because it uses blockchain.
That’s a big win for regulatory clarity, which is something the entire crypto industry has been crying out for.
So… Is the Product Coming Back?
You might think that with this win under their belt, Block Earner would be racing to bring the “Earner” product back to life.
Surprisingly, that’s not the case.
Coombes confirmed that the company won’t be reviving the old product. It was shut down when the legal trouble started, and it’s staying that way—for now.
However, he also made it clear that Block Earner remains committed to crypto-backed loans as the core of its business. These types of products still hold strong potential, especially now that the legal landscape is a little more favorable.
Regulators Still Have a Role to Play
“Regulation going forward is not an easy task, and we empathize with the regulators on this point,” he said.
He’s not wrong. The crypto world is changing fast, and regulators are trying to keep up with systems and laws that weren’t built for digital assets. It’s not an easy job.
But this ruling shows that collaboration—not conflict—is the better path forward. Clear communication, transparent product design, and fair treatment under the law are all essential if crypto is going to thrive in Australia or anywhere else.
A Precedent for the Future
While every legal case is different, this ruling will likely become a reference point for future cases involving crypto lending, fixed-yield products, or blockchain-based financial tools.
It also highlights the importance of careful legal design in the crypto space. Block Earner’s terms and conditions were clear and specific. That made all the difference in court. Other startups would be wise to follow suit: clarity protects both businesses and users.
What Happens Next?
At the moment, ASIC is still reviewing the decision. They haven’t said whether they’ll pursue any further legal action, appeal to a higher court, or perhaps even lobby for changes in the law. That’s something we’ll be watching closely.
Meanwhile, Block Earner can move forward with more certainty, and other crypto startups in Australia may feel a little more confident exploring new ideas, without fear of being slapped with lawsuits for offering basic, transparent financial services.
Bottom Line: A Win for Innovation—and Fairness
The Block Earner case wasn’t just about one company. It was about how we define and regulate crypto products, and whether those regulations are fair, clear, and based on how a product actually works, and not just what technology it uses.
In the end, the court chose logic over fear, clarity over assumption, and innovation over overreach.
That’s a win not just for Block Earner, but for every crypto builder in Australia trying to play by the rules—and for anyone who believes that technology and regulation can evolve together, not at odds.