Crypto and DeFi Update
/Finder Wallet sued by ASIC
The Australian Securites and Investments Commission (ASIC) has commenced proceedings against Finder Wallet Pty Ltd, a subsidiary of Finder.com, a comparison website. Allegations include the company providing unlicensed financial services, breached product disclosure requirements and failed to comply with design and distribution obligations (DDO) regarding its crypto-asset-related product Finder Earn.
Finder Wallet offered Finder Earn in 2022, with customers depositing Australian dollars into their accounts. The AUD was then converted into a stablecoin called TAUD and allocated to Finder Wallet to use as working capital. Finder Wallet paid customers in AUD an annual return of either 4.01 per cent or sometimes 6.01 per cent in exchange for the use of their money.
ASIC alleged that the Finder Earn product was a debenture. A debenture is a type of debt instrument not backed by collateral, backed only by the reputation and creditworthiness of the issuer. ASIC alleges that Finder Wallet required an Australian financial services licence to offer such a product, as it was providing financial advice or dealing in a financial product.
Since ASIC deems Finder Earn a financial product, it is required to comply with DDO. After ASIC notified Finder Wallet of its concerns, the scheme was ended and all funds were returned to customers.
Goldman Sachs looking into buying crypto companies after FTX collapse
Goldman Sachs executive, Mathew McDermott, has said to media outlet Reuters that the company is doing due diligence on some crypto-asset firms after the FTX collapse left the industry in tatters. Goldman Sachs is investigating the purchase of some crypto firms while prices are low.
BTC Markets launches Polkadot cryptocurrency
A large Australian cryptocurrency exchange has announced the addition of Polkadot (DOT) to their trading platform, available from December 7.
BlockFi files for bankruptcy
BlockFi, a cryptocurrency exchange, has filed for bankruptcy (Chapter 11 protection) - another casualty of the FTX collapse. The company is looking to restructure to stabilise the business, recovering all obligations owed to its counterparties, including FTX. BlockFi said it has sufficient liquidity to support certain operations during the restructure.
ASIC commences proceedings against Block Earner over unlicensed advice
Federal Court proceedings have been commenced against Block Earner, an authorised representative of Flash Partners and AUSTRAC-registered cryptocurrency exchange. The company offered fixed-yield earning products based on crypto-assets, such as USD Earner, Gold Earner and Crypto Earner. ASIC alleges Block Earner was providing unlicensed financial advice and was running an unregistered managed investment scheme. ASIC says the products should have been licenced.
