Last week, ASIC lost a case in the Federal Court against comparison site Finder over whether Finder provided an unlicensed financial service with the crypto product Finder Earn. ASIC argued it was a “bond”, but Judge Brigitte Markovich disagreed.

Commenting on the win, Finder’s chairman and co-founder, Fred Shebesta, said: “Innovation always moves faster than regulation and this case is a great example. It highlights the need for more open communication between innovators and regulators to navigate emerging sectors by ensuring a collaborative approach to both progress and compliance.”

The regulator had previously won a case in February 2024. v. Block Earner, its first crypto enforcement action, where the court found that Block Earner operated an unregistered managed investment scheme and engaged in unlicensed financial services when it offered its crypto-backed Earner product.

However, despite winning the entire case, the court disagreed with ASIC's contention that the crypto-asset-based variable return Block Earner offering was a financial product.

Liam Hennessy, partner at law firm Clyde & Co and financial services risk and compliance specialist, said the win for comparison site Finder should give the industry more confidence.

“This is the first time Australian courts have considered what a bond actually legally 'is', along with the added complexity of a blockchain overlay.

"This gives the Australian industry and consumer market greater confidence in the regulatory position (as well as a win for ASIC in the broader sense of 'clarification') which is sorely needed as crypto is the second largest financial product , held by Australians after the stock-based on ASIC's own research.

Although crypto-assets are not one of the regulator's priorities for enforcement in 2024, it currently has at least two other crypto-related civil criminal proceedings. One was announced in September against crypto exchange Bit Trade and the second in October against BPS Financial.

“Firms offering crypto-asset products should carefully consider whether their offerings are financial products under the existing regime. And if they are, make sure they're properly licensed and authorized before they distribute them,” Vice President Sarah Court said last year.

Difficulties in enforcing crypto activity have prompted the Treasury to hold a consultation on the introduction of a regulatory framework for the asset, and Hennessy said its introduction would prompt ASIC to take more enforcement action in the space going forward.

The Digital Asset Platform Regulation Consultation seeks to introduce a regulatory framework to address consumer harm in the crypto ecosystem while supporting innovation.

The proposed regulatory framework will apply to digital asset platforms that pose similar risks to entities that operate in the traditional financial system. It proposes to use Australia's financial services framework to regulate digital asset platforms to ensure consistent oversight and safeguards for consumers.