The Australian federal court has rejected a lawsuit filed by the country’s corporate regulator against a sister company of Australian fintech firm Finder.com. The court found that Finder Earn, the company’s yield-bearing product, was compliant with financial laws.
Justice Brigitte Markovic ruled that the Australian Securities and Investments Commission (ASIC) failed to prove that Finder Earn was a debenture under the Corporations Act. As a result, the alleged contraventions of the Act could not be upheld, and the case was dismissed with costs.
ASIC had sued Finder subsidiary Finder Wallet in December 2022, claiming that its Finder Earn product was an unlicensed financial product and required the company to hold a financial services license. However, Finder had already discontinued the product a month prior, citing a strategic business decision influenced by increased interest rates rather than regulatory concerns.
A Finder spokesperson described the court’s decision as a “landmark win.” They also stated that there are currently no plans to relaunch the Earn product.
In a blog post, Finder Global CEO and co-founder Frank Restuccia expressed his satisfaction with the outcome, highlighting that Finder had complied with regulatory obligations and engaged openly with ASIC throughout the process.
ASIC’s executive director of enforcement and compliance, Tim Mullaly, stated that the regulator pursued the matter to ensure consumer protection. ASIC will carefully consider the judgment and has the option to lodge an appeal bid to the Full Federal Court within 28 days.
This ruling follows ASIC’s recent partial victory against crypto yield platform Block Earner, where the court determined that Block Earner needed a financial services license for its yield-bearing product. However, the court did not classify Block Earner’s DeFi “Access” product as requiring a license.
Overall, Finder’s successful defense against ASIC’s lawsuit reinforces the importance of regulatory compliance in the fintech industry.