Australia's High Court delivered a unanimous 7-0 decision in Australian Securities and Investments Commission v Block Earner Pty Ltd in 2026, finding that Block Earner operated an unlicensed financial product when it offered its Earner service. Earner paid fixed yields to users who deposited digital assets between March and November 2022. ASIC obtained special leave to appeal on 4 September 2025. The High Court heard argument in Canberra on 12 March 2026 and reversed the Full Federal Court's earlier judgment that had found against ASIC.
The High Court applied section 763A of the Corporations Act 2001 (Cth), which defines a financial product as a facility through which a person makes a financial investment, manages financial risk, or makes non-cash payments. Applying section 763B, the Court held that Earner was such a facility. Block Earner argued that DeFi protocol interactions outside its direct control severed the causal link between the investor and the financial outcome. The High Court rejected that argument.
Digital asset platforms, crypto lending desks, and yield-generating services offering fixed or variable returns to Australian users must now assess their products against the Corporations Act 2001 financial product definition. The ruling confirms that the mechanism of yield generation, whether on-chain or off-chain, does not determine product classification. The investor's expectation of a return and the operator's role as intermediary are the material factors. Platforms without an Australian Financial Services Licence that qualify as financial product issuers must restructure their offering or obtain an authorisation before continuing to operate.
The decision diverges from the Full Federal Court's August 2025 dismissal of ASIC's appeal in the Finder Wallet matter, where the court found Finder's product distinguishable from a managed investment scheme. The degree of operator control over returns and the specific product structure remain material to classification. ASIC is expected to publish further guidance on the classification of digital asset yield products following this ruling.
Licentium advises digital asset businesses on Australian regulatory classification, AFSL licensing strategy, and product structuring for crypto-native services. We work with specialist Australian counsel through our partner network. Work we undertake includes financial product classification analysis, managed investment scheme reviews, AFSL application support, and regulatory strategy for crypto platforms seeking to operate in the Australian market.
Source: ASIC Media Release 26-124MR, ASIC v Block Earner Pty Ltd, High Court of Australia, 2026