Australian fintech firm, Block Earner, is introducing a new loan product, secured by Bitcoin, despite facing a court case with a regulatory body accusing them of offering financial services unlicensed. This new loan service allows Australian cryptocurrency investors to use their crypto holdings as collateral to borrow cash, a system reminiscent of what Coinbase launched and later had to terminate in the US.
The forthcoming product launch, expected by the end of September, has been touted by Block Earner as a cautious venture aimed specifically to align with existing licensing structures. This approach appears to be a result of Block Earner’s previous experience when it was sued by the Australian Securities and Investments Commission (ASIC) for supposedly offering crypto-tied fixed-yield earning products without an Australian Financial Services (AFS) license.
Denouncing the regulator’s lack of clarity, Block Earner’s co-founder, Charlie Karaboga, stated that his firm had invested considerable resources in developing products believed to conform to ASIC guidelines. Yet, regulations remained ambiguous. Counter movements from the regulator against Block Earner and rival crypto firm, Finder, were seen as reactive and mostly linked to the FTX crash in November.
Having weathered the fallout, with ASIC pursuing legal action, Karaboga cited having refunded all users and closed down company’s gain products. Learning from this experience, James Coombes, Block Earner’s Head of Business, assured that the new product is already within Australian credit license rules and wouldn’t see the same fate as their Earn product.
In the face of these regulatory challenges, Karaboga is hopeful of further clarity in the near future, asserting that advancements in regulatory frameworks in Singapore, Hong Kong and the UK would exert pressure on the Australian government to keep pace or risk losing market share of crypto enterprises. He predicts more clarity within the next year and half.
Additionally, he stated that due to Australia’s wealth, in terms of per-capita GDP, and its citizens being early adopters of the crypto industry, they have become prime targets for fraudsters, underscoring the urgency for precise regulations. He strongly believes that domestic regulators are pro-crypto and desire to push forward innovation. This outlook is also shared by Binance Australia’s General Manager, Ben Rose, who stated he was confident Australian regulators would eventually lean towards crypto. Block Earner’s Federal Court hearing is slated for November, with a decision expected by January 2024.
Source: Cointelegraph
