Financial product comparison site Finder.com has been sued by the Australian financial services regulator for offering cryptocurrency yield products without obtaining the necessary licenses.
It is the second local provider of crypto yield products to be targeted by regulators, following action against Block Earner in November.
Australian Securities and Investments Commission (ASIC) I started Legal proceedings against Finder Wallet, a locally registered digital currency exchange subsidiary of Finder.com, on December 15th.
ASIC argued that the Finder Earn product was an unlicensed financial product and that Finder Wallet violated product disclosure requirements and did not comply with its obligations regarding targeted distribution of financial products.
Finder Earn offered users annual yields between 4.01% and 6.01% for depositing the Australian dollar-pegged stablecoin True AUD (TAUD).
ASIC argued that the product was a corporate bond (unsecured debt instrument) and required an Australian Financial Services (AFS) license.
Finder Earn claimed that it “exposed consumers to potential harm” by possibly providing them with products “not suitable for them.” Finders disagree with this assessment.
A Finder.com spokesperson told Cointelegraph, “We do not share ASIC’s view that Finder Earn can be considered a corporate bond.”
“Since the launch of Finder Earn in November 2021, we have been actively working with ASIC and fully cooperating with them on all of their information requests.”
Finder acquisition issunsetASIC claimed it notified Finder Wallet of its concerns on November 24.
A Finder.com spokeswoman said the decision to discontinue the product due to rising interest rates was a “strategic business decision” and was not “driven by regulatory review.” claimed.
“We were in the process of this sunset when we were notified [ASIC] We may take a closer look,” they added.
Spokespeople for ASIC and Finder.com said all user funds were returned in full after the termination of Finder Earn.
When asked if he would contest the lawsuit, Finder said, “We have no further comment as this matter is currently in court.”
ASIC Vice Chairman Sara Kort said in a statement: “The message to the industry is clear: just because the offer involves crypto-related products, we ensure that it stays out of the current regulatory regime. not something to do,” he said.
ASIC’s lawsuit against Finder.com is the third lawsuit against cryptocurrency financial products and the companies that offered them.
November ASIC Fintech company Block Earner sued Similarly, for offering three cryptocurrency-backed fixed-yield income products without an AFS license. In response to the lawsuit, Block Earner’s CEO lashed out at a “lack of clarity” in the country’s financial licensing system.
BPS Financial, a financial services company, sued by regulators In October, a “misleading” allegation was filed that Qoin is regulated in Australia for “unauthorized activity” related to the “Qoin” token.
ASIC Chairman Joe Longo warned before “Action will be taken” against companies promoting what he called “high-risk, niche” cryptocurrency investment products, he said.