ASIC has launched civil proceedings in the Federal Court against comparison website Finder.com, alleging it offered a crypto product without a financial services licence.
The Australian Securities and Investments Commission also alleges the website provided illegal financial advice, unlicensed financial services, breached product disclosure requirements, and didn’t comply with ‘design and distribution’ obligations.
Finder Wallet, a subsidiary of Finder.com, offered the now defunct Finder Earn, which allowed customers to invest in stablecoins for a fixed return.
At last November’s launch, Finder said the “not a banking product, not a savings account, but a stable, deposit-like return for pledging fiat into crypto”.
ASIC disagrees, arguing it was a debenture, and therefore classed as a financial product.
“This is because customers deposited money with Finder Wallet on the understanding that their money would ultimately be repaid, together with a return for allowing Finder Wallet to use their capital,” ASIC said.
“ASIC also alleges that Finder Wallet required an Australian financial services licence to offer Finder Earn because it was providing financial product advice or dealing in a financial product.”
Finder CEO Frank Restuccia claimed Finder Earn’s closure this month was a “strategic business decision” due to rising interest rates.
ASIC claims it was because the offering was already in the regulator’s crosshairs.
Finder will appeal any ruling.
“We do not share ASIC’s view that Finder Earn can be regarded as a debenture,” a spokesman said.
“Since Finder Earn was launched in November 2021, we have proactively engaged with ASIC and have co-operated fully with all ASIC requests for information.
“An innovative product, Finder Earn offered customers a way to earn yield on their crypto.”
All money has been returned to customers, according to both Finder and ASIC.
