The Full Federal Court has published a decision of note for practitioners servicing the cryptocurrency industry.
In ASIC v Web3 Ventures Pty Ltd [2025] FCAFC 58, the Court allowed Web3’s cross appeal concerning its Block Earner product. Block Earner allowed customers to loan cryptocurrency for a fixed rate return.
The finding means Web3 is not required to hold a Financial Services Licence because the Block Earner product is not a “Financial Product” as defined in the Corporations Act.
ASIC contended that Block Earner was a financial product because it was: (i) a managed investment scheme; (ii) a facility by which a person made a financial investment; or (iii) a derivative.
On the Managed Investment Scheme contention, the Court endorsed Web3’s submission that customers get “a contractual entitlement to be paid the benefits of returning the cryptocurrency that they’ve lent plus interest. They’re entitled to that regardless of how well or how poorly Block Earner might be doing in its own investment activities.”
The Financial Investment contention was dealt with by the Court at [90] and accepted Web3’s submissions on the Derivative contentions at [126] to [128].
Brandon Smith of Banco Chambers appeared for Web3. He was led by Stephen Free SC and instructed by Gilbert + Tobin. Jerome Entwisle of Banco Chambers also appeared for Web3 at first instance.
