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Post: Australian Federal Court Rules Crypto Firms Need Financial Services License for Yield Products

Australian Federal Court Rules Crypto Firms Need Financial Services License for Yield Products

Key Points:

  • The Australian federal court has ruled that crypto firms offering managed yield products require a financial services license.
  • The distinction was made between products that promise a managed yield and “pass-through” products.
  • In a recent ruling, Block Earner was penalized for offering its “Earner” product without an Australian Financial Services License.

Elaborate With Insight:

According to a recent ruling by the Australian federal court, crypto firms in the country need to carefully consider how they market their offerings. The court made a distinction between crypto-yield products, stating that those promising a managed yield will require a financial services license. On the other hand, “pass-through” products will not require such licensing.

In the case of Block Earner, the court ordered penalties for offering its “Earner” product without obtaining an Australian Financial Services License. The “Earner” product offered yield for loans denominated in USD Coin (USDC), Bitcoin (BTC), Ether (ETH), and PAX Gold (PAXG). The court ruled that Block Earner did not hold a license and emphasized that it needed to obtain one.

Hot Take:

This ruling by the Australian federal court demonstrates the importance of regulatory compliance in the cryptocurrency industry. With the growing popularity of crypto-yield products, it is crucial for firms to understand and adhere to local regulations. This ruling sets a precedent for how these products are marketed and underscores the need for proper licensing to ensure consumer protection and prevent potential legal consequences.

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