Australian financial market regulator continues its crackdown against illegal cryptocurrency offerings, with its latest civil penalty proceedings against Web3 Ventures Pty Ltd, operating under its tradename Block Earner.
The Australian Securities and Investments Commission (ASIC) alleged that the fintech company provided unlicensed financial services with its cryptocurrency offerings and operated an unregistered managed investment scheme.
Block Earner does not have an Australia Financial Services (AFS) license but is an AUSTRAC-registered digital currency exchange. It offered several cryptocurrency-based fixed-yield earning products, including USD Earner, Gold Earner and Crypto Earner, collectively known as Earner Products.
According to ASIC, these 'Earner Products' are financial products that fall under managed investment schemes and require proper licensing. It is now seeking declarations, injunctions and pecuniary penalties.
"We are concerned that Block Earner offered financial products without appropriate registration or an Australian Financial Services license, leaving consumers without important protections," said Sarah Court, the Deputy Chair at ASIC. "Simply because a product hinges on a crypto-asset, does not mean it falls outside financial services law."
Actions against Crypto Firms
Earlier, the Aussie regulator temporarily suspended three cryptocurrency funds of Holon, citing inappropriate target market determination. On top of that, it is seeking civil penalties from BPS Financial for alleged false representation when marketing for Qoin, a crypto asset token.
Court added: "ASIC is aware that many consumers are interested in purchasing or investing in crypto-assets. Crypto-assets are risky, inherently volatile and complex, and ASIC remains concerned that potential investors in crypto-assets may not fully appreciate the risks involved. ASIC supports the development of an effective regulatory framework covering crypto-assets to protect consumers and investors."
Meanwhile, the regulator suspended the license of the local entity of FTX until May 2023 following the collapse of the cryptocurrency exchange giant. The regulator even warned against fake initial coin offering (ICO) fraud and showed how to spot a cryptocurrency scam.
