Australia's High Court unanimously rules Block Earner's crypto yield product required a financial license

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), tasted victory in its legal challenge of a now-discontinued Block Earner fixed-yield crypto product when the High Court submitted a 7-0 ruling in its favor today, June 17. 

The court’s unanimous decision means that Block Earner is now being considered for running a financial product under the Corporations Act without the appropriate Australian financial services license.

Today’s High Court ruling overturns an April 2025 Federal Court ruling that exonerated Block Earner. It also caps off a four-year legal battle that observers expect to set a precedent for digital asset products regulation in the country down under.

Why did the ASIC sue Block Earner? 

Block Earner, the trading name of Web3 Ventures Pty Ltd, first landed on the ASIC’s radar because of the Earner product it offered customers between March and November 2022. 

How it worked at the time was that Block Earner would generate income from customers’ Australian dollars (AUD) or crypto deposits by lending the crypto to third parties, paying out fixed-yield returns, according to court documents and ASIC’s media release.

By the time ASIC filed civil penalty proceedings in November 2022, Block Earner had actually stopped offering the product. Still, the regulator argued that customers were left exposed because the firm never had the Australian Financial Services Licence (AFSL) to offer that product. 

ASIC and Block Earner’s four years of legal drama 

The case has taken a winding path. A Federal Court judge initially agreed with ASIC in February 2024, finding Block Earner had breached licensing requirements. But in a separate decision four months later, the same court relieved the company of any penalty obligation.

Block Earner cross-appealed on the licensing question itself, and in April 2025, the Full Federal Court sided with the company, finding that Earner was not a financial product. That court placed heavy emphasis on the literal wording of Block Earner’s terms of use, which stated that loaned crypto would not be used to generate a benefit for users, according to an analysis by law firm K&L Gates.

ASIC then sought special leave to take the fight to Australia’s highest court. The High Court granted that request in September 2025, with hearings taking place in Canberra on 12 March 2026.

What did the High Court decide in ASIC vs. Block Earner case?

All seven justices found that Earner qualified as a facility through which investors made a financial investment. The court said it was enough that customer funds were used, or intended to be used, to produce returns for both the customer and the issuer. 

Arguing otherwise “would ignore the commercial reality of any such financial investment,” according to the judgment.

The justices also accepted ASIC’s argument that Earner functioned as a derivative because customer payouts shifted based on crypto asset values and exchange rate movements, according to ASIC’s media release.

ASIC Chair Sarah Court said the ruling “clarifies when products that provide a return fall within the existing financial services regulatory regime.” She added that firms offering products involving returns or asset conversion “must carefully consider whether their offerings are financial products” and obtain proper licensing before distributing them.

The High Court stressed that the Corporations Act’s definition of a financial product was written to be broad and technology-neutral, meaning it can capture novel product types without legislative amendments, according to the ASIC statement.

How is Block Earner reacting to the High Court ruling?

Block Earner CEO and co-founder Charlie Karaboga acknowledged the ruling but pushed back on the broader approach. He said legal clarity for digital assets “should come through proper legislative reform, not retrospective litigation.” 

Karaboga pointed out that the case involved a product the company voluntarily shut down in 2022 and that no finding of customer loss, dishonesty, or misconduct was made. 

He called it “unfortunate that such significant questions about the application of financial services law to digital assets have had to be tested through enforcement against a small, innovative Australian startup.” 

In an ironic twist, ASIC granted Block Earner an Australian Credit Licence in May 2026, weeks before the High Court decision came down. That license made it the first crypto platform in Australia authorized to offer regulated lending products under its own credit license.

What penalty will Block Eaner face now? 

The penalty question remains unresolved. A June 2024 Federal Court decision that relieved Block Earner of penalty liability is still under appeal by ASIC. That matter now returns to the Full Federal Court for determination.

Separately, Australia’s Parliament passed the Corporations Amendment (Digital Assets Framework) Act in April 2026, establishing new rules for asset platforms and tokenized custody platforms.

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