ASIC has announced it has commenced legal action against Finder Wallet Pty Ltd, a subsidiary of comparison website Finder.com, for allegedly providing unlicensed financial services, breaching product disclosure requirements and failing to comply with design and distribution obligations in relation to its crypto-asset related product Finder Earn.
ASIC contends that between about late February 2022 and 10 November 2022 Finder Earn was offered to consumers on terms that the consumer, in acquiring, investing in or using Finder Earn, deposited with or lent money to Finder Wallet, and Finder Wallet undertook to repay that money as a debt.
ASIC alleges that the product amounted to a “debenture” for the purposes of the Corporations Act 2001 (Cth) and that there are a number of requirements of the Corporations Act with which Finder Wallet did not comply.
Finder Wallet offered the Finder Earn product to consumers without an accompanying disclosure document.
Finder Wallet did not make a target market determination for Finder Earn.
After ASIC notified Finder Wallet of its concerns, Finder Wallet ceased offering Finder Earn from 24 November 2022 and all funds were returned in full to customers.
Finder Earn was marketed as making use of a cryptocurrency called “TrueAUD” (TAUD), which was described on the website as a “stablecoin”, “pegged” against the “currency or asset which it aims to reflect, digitised in the blockchain ecosystem” (in TAUD’s case, the relevant currency is Australian dollars).
Once an allocation of TAUD was made, there was an “Earn Term”, during which the consumer earned a “return”, being 4.01% p.a. (or a promotional rate of 6.01% p.a.).
ASIC is seeking declarations of contravention and monetary penalties from the Federal Court.
If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.
Author: David Jacobson
Principal, Bright Corporate Law
Email:
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
