Australia’s High Court delivered a unanimous 7-0 ruling on June 17, 2026, finding that Block Earner’s former “Earner” fixed-yield crypto product required an Australian Financial Services Licence (AFSL). The decision overturns the Full Federal Court’s April 2025 ruling that had favored Block Earner and sends the penalty matter back to the Full Federal Court.
The High Court concluded that the Earner product functioned as both a facility for financial investment and a derivative, meaning it fell squarely within the definitions of the Corporations Act. Justices emphasized that customer funds were used to generate returns, and that payouts shifted with changes in crypto asset values and exchange rates—meet the legal criteria for a financial product.
The case began in November 2022 when the Australian Securities and Investments Commission (ASIC) launched civil proceedings against Web3 Ventures Pty Ltd, which operated Block Earner. The Earner product, available from March to November 2022, allowed users to deposit Australian dollars or crypto to receive fixed yields from lending activities. Although the product was shut down the same month ASIC filed, the regulator argued that the lack of an AFSL denied users key protections. The Federal Court initially ruled in ASIC’s favor in February 2024, finding the product was an unregistered managed investment scheme, but later relieved Block Earner of penalties in June 2024. Block Earner’s cross-appeal then succeeded in April 2025 before the Full Federal Court, which dismissed ASIC’s appeal and found Earner was not a financial product. ASIC obtained special leave to appeal to the High Court in September 2025, culminating in today’s ruling.
ASIC Chair Sarah Court said the decision “clarifies when products that provide a return fall within the existing financial services regulatory regime” and noted that corporations must “carefully consider whether their offerings are financial products” before distributing them. The High Court stressed that the law’s definition of a financial product is broad and technology-neutral, capable of capturing novel products without legislative amendments.
Block Earner CEO Charlie Karaboga acknowledged the ruling but criticized the enforcement approach, calling for “proper legislative reform, not retrospective litigation.” He highlighted that the product was voluntarily closed in 2022 and no customer loss or misconduct was found. In a coincidental development, ASIC granted Block Earner an Australian Credit Licence in May 2026, making it the first crypto platform authorized to offer regulated lending under its own credit license. The company is now pivoting to Bitcoin-backed home loans. The penalty determination now returns to the Full Federal Court, where ASIC’s appeal against the earlier penalty relief remains pending.
