High Court rules Block Earner yield product needed licence

Australia's High Court delivered a unanimous 7-0 ruling on June 17 that Block Earner's fixed-yield Earner product required an Australian financial services licence. The court found Web3 Ventures Pty Ltd, trading as Block Earner, offered a facility for financial investment and that the product met the legal test for a derivative because investor returns varied with the value of underlying digital assets and with exchange rates. The matter returns to the Full Federal Court to decide penalties sought by the Australian Securities and Investments Commission.

ASIC opened civil penalty proceedings in November 2022, asserting the Earner product had been offered without a licence and left investors without statutory protections. In February 2024 the Federal Court concluded Block Earner had operated an unregistered managed investment scheme. In June 2024 the Federal Court relieved the company from financial penalties; ASIC appealed that relief the same month and Block Earner filed a cross-appeal in July 2024. The Full Federal Court allowed Block Earner's cross-appeal in April 2025; the High Court reversed that decision in June 2026.

Block Earner voluntarily closed the Earner product in November 2022 and has moved away from yield-bearing offerings. In May 2026 the company received an Australian Credit Licence and has been developing a crypto-backed home loan, the first time a digital asset platform in Australia has been licensed to provide credit products under its own licence.

The High Court's judgment centered on statutory interpretation of what counts as a facility for making or managing investments and on whether promised returns were tied to underlying digital asset prices. Because returns rose and fell with asset values and exchange rates, the court held the product fell within existing financial services regulation.

With the case returned to the Full Federal Court, judges there will decide whether ASIC's civil penalty claims can be enforced and what sanctions, if any, should apply. The ruling affects other crypto firms offering yield products or structured digital-asset offerings in Australia, where regulators have increased scrutiny of licensing and consumer protections.

ASIC chair Sarah Court, in a statement, welcomed the ruling: “The definition of financial product is broad and technology neutral and so captures new and emerging products without the need to amend the legislation.”