In an appeal brought by ASIC, the High Court has unanimously found that the fixed-yield digital asset product ‘Earner’ offered by Block Earner was a financial product, and that Block Earner consequently required an Australian financial services licence.
The 7-0 ruling overturns the Full Federal Court’s previous decision in 2025 (25-062MR).
From March to November 2022, Block Earner offered Earner, which provided investors with fixed yield returns from digital assets.
The High Court found that Earner was a financial product requiring a financial services licence, as it was a facility through which an investor made a financial investment.
The High Court confirmed it was sufficient that investors’ funds were used or intended to be used to generate a return for both the investor and the issuer, noting ‘any contention otherwise would ignore the commercial reality of any such financial investment.’
The High Court also accepted ASIC’s argument that Earner was a derivative as the amount returned to investors varied by reference to the value of the digital asset and exchange rates.
ASIC took this action because of concerns Earner was offered without a licence, leaving investors without important protections (22-324MR).
ASIC Chair Sarah Court said ‘ASIC welcomes this important decision which clarifies when products that provide a return fall within the existing financial services regulatory regime.
‘This reinforces ASIC’s long-standing position that the definition of financial product is broad and technology neutral and so captures new and emerging products without the need to amend the legislation.’
In commenting on the financial product definitions in the Corporations Act 2001 (the Act), the High Court emphasised that the legislative framework is deliberately broad and adaptable.
In determining that Earner was a financial product, the High Court focused on the underlying arrangements and contractual substance of Earner, rather than how it was labelled or marketed.
‘Firms offering products that provide a return to consumers or involve the conversion of assets must carefully consider whether their offerings are financial products, and if so, ensure they are appropriately licensed or authorised before distributing them,’ Ms Court continued.
The matter will now return to the Full Court of the Federal Court for ASIC’s appeal against the penalty judgment of the Federal Court.
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Background
Block Earner is the trading name of Web3 Ventures Pty Ltd.
On 23 November 2022, ASIC commenced civil penalty proceedings in the Federal Court against Block Earner, alleging it provided unlicensed financial services and operated an unregistered managed investment scheme in relation to digital asset-based products (22-324MR).
On 9 February 2024, the Federal Court found that from March to November 2022, Block Earner engaged in unlicensed financial services conduct and operated an unregistered managed investment scheme by offering the Earner product (24-019MR).
On 4 June 2024, the Federal Court relieved Block Earner from liability to pay a penalty for offering the Earner product (24-119MR). ASIC appealed this decision on 18 June 2024 (24-128MR).
On 9 July 2024, Block Earner cross-appealed the Federal Court’s decision that Block Earner needed a financial services licence to offer its Earner product and on 6 March 2025, the Full Court of the Federal Court heard those appeals.
On 22 April 2025, the Full Court of the Federal Court allowed Block Earner’s cross-appeal and dismissed ASIC’s appeal (25-062MR).
On 21 May 2025, ASIC sought special leave from the High Court of Australia to appeal the Full Court’s decision (25-082MR).
The High Court granted ASIC special leave on 4 September 2025 (25-194MR) and the hearing took place in Canberra on 12 March 2026.
The Corporations Amendment (Digital Assets Framework) Act 2026 (the Act) was passed by Parliament on 1 April 2026 and Asset Platforms and Tokenised Custody Platforms.
In April 2026, ASIC released a roadmap for implementing digital asset law reform over the next 18 months (ASIC's roadmap for digital assets law reform implementation).
ASIC has begun implementing the Act with stakeholder consultation underway to develop the additional standards contemplated by the regime, regulatory guidance and licensing requirements ahead of its commencement in April 2027.
ASIC’s Information Sheet 225 - Digital assets: Financial products and services (INFO 225) assists digital asset product and service providers to understand their obligations under financial services laws.
