Finder Wallet sued for alleged improper licensing

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ASIC deputy chair Sarah Court said the civ­il pro­ceed­ing was the regulator’s third recent action against a firm offer­ing a “cryp­to-asset relat­ed prod­uct” con­sid­ered to be a finan­cial prod­uct, includ­ing action against fin­tech com­pa­ny Block Earn­er for alleged­ly pro­vid­ing unli­censed finan­cial ser­vices, and BPS Finan­cial for alleged­ly issu­ing mis­lead­ing state­ments regard­ing its cryp­to-asset, Qoin.

“Our mes­sage to indus­try is clear – just because an offer involves a cryp­to-asset relat­ed prod­uct does not guar­an­tee it will fall out­side the cur­rent reg­u­la­to­ry regime,” she said.

ASIC also alleged that Find­er Wal­let did not hold an Aus­tralian finan­cial ser­vices licence – a require­ment for busi­ness­es pro­vid­ing finan­cial prod­uct advice or deal­ing in finan­cial prod­ucts – when offer­ing Find­er Earn, thus poten­tial­ly plac­ing their cus­tomers in harm’s way, such as by offer­ing them a prod­uct that was not suit­able for them.

A Find­er spokesper­son said the com­pa­ny has “proac­tive­ly engaged” with ASIC and coop­er­at­ed ful­ly with all requests for infor­ma­tion. How­ev­er, the firm will defend the proceedings.

Load­ing

“We do not share ASIC’s view that Find­er Earn can be regard­ed as a deben­ture,” said a Find­er spokesper­son. “An inno­v­a­tive prod­uct, Find­er Earn offered cus­tomers a way to earn yield on their cryp­to. All cus­tomers’ cap­i­tal was returned in full and the prod­uct was sun­set last month.”

ASIC is seek­ing pecu­niary penal­ties – mon­e­tary fines imposed and col­lect­ed by civ­il courts – and dec­la­ra­tions from the court. The date for the first hear­ing has not yet been scheduled.

The Aus­tralian Finan­cial Review report­ed that Find­er held $17.3 mil­lion in mem­ber hold­ings and $2.2 mil­lion in “dig­i­tal asset mem­ber hold­ings”, accord­ing to cor­po­rate fil­ings from June this year. It also report­ed that the com­pa­ny claimed to have paid about $500,000 to Find­er Earn cus­tomers before the cryp­to product’s closure.

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