The Federal Court has dismissed an appeal by the Australian Securities and Investments Commission (ASIC), ruling that the Finder Wallet product does not qualify as a financial instrument.
The verdict ends the Finder Wallet lawsuit, a nearly three-year legal battle that tested how cryptocurrency-based yield services fit within existing financial regulations.
The court upheld an earlier judgment that Finder Wallet and its now-discontinued Earn product complied with consumer financial laws.
The case marked the first time an Australian court assessed whether a crypto yield service could be classified as a debenture—a key legal distinction that could influence future regulatory approaches.
Finder Wallet lawsuit: A test case for crypto regulation
The Finder Wallet lawsuit centered on whether the product—which offered users 4% to 6% annual yield on stablecoin deposits—constituted a regulated financial instrument. ASIC had argued that it functioned similarly to a debenture, but the court disagreed.
“This ruling confirms that innovative crypto products can operate outside traditional financial frameworks if structured appropriately,” said Fred Schebesta, founder of Finder.com, in a statement to Cointelegraph. “We designed Finder Wallet with full transparency and engaged ASIC throughout the process.”
The decision could embolden other fintech firms to explore crypto-based yield services without fear of immediate regulatory pushback. However, experts caution that the outcome doesn’t create blanket immunity.
“This case narrows ASIC’s reach but doesn’t eliminate it,” said Angela Flannery, a financial regulation partner at Holding Redlich. “Regulators will likely refine their approach to similar products post-Finder Wallet lawsuit.”
Finder Wallet lawsuit ends in victory as court rules crypto product isn’t a financial instrument
How Finder Wallet worked—and why it shut down
Launched in February 2022, Finder Wallet allowed users to convert Australian dollars into TrueAUD (TAUD), a stablecoin pegged 1:1 to the AUD, and earn interest by holding it in Finder Wallet. The product ceased operations in November 2022 amid ASIC’s scrutiny, with all user funds returned—totaling over 500,000 TAUD (~$336,000).
The company maintained that Earn was a “tokenized reward system” rather than an investment product. The court’s acceptance of this argument hinged on technicalities, including the absence of a contractual promise of repayment—a hallmark of debentures.
Industry celebrates, but regulatory uncertainty remains
The fintech sector hailed the verdict as a victory for innovation.
“This is a win not just for Finder, but for fintech in Australia,” Schebesta declared. “Emerging crypto services deserve regulated pathways like any other asset class.”
Finder Wallet lawsuit ends in victory as court rules crypto product isn’t a financial instrument
Yet the Finder Wallet lawsuit leaves lingering questions. ASIC, which declined to comment after the ruling, may appeal to the High Court or seek legislative changes to close perceived loopholes.
“Regulators won’t stop here,” Flannery noted. “The Finder Wallet lawsuit sets a precedent, but Parliament could rewrite the rules.”
Meanwhile, Schebesta teased a new project building on this legal win, though details remain undisclosed.
Key points from the Finder Wallet lawsuit
Legal clarity: Crypto yield products may avoid debenture classification if structured without repayment guarantees.
Regulatory gap: Current laws struggle to categorize hybrid crypto-financial services, inviting future policy updates.
Industry impact: The ruling could spur more crypto yield offerings—and more ASIC scrutiny.
The Finder Wallet lawsuit shows the tension between innovation and regulation in crypto. While a milestone for fintech, it’s unlikely to be the last word.
Sunderland-born crypto enthusiast, cycling fanatic, and wordsmith. As co-founder and lead editor of The Bit Gazette, Mark combines his passion for blockchain with a knack for breaking down complex stories into engaging content. When he's not tracking the latest crypto trends, you'll find him on two wheels—exploring backroads or clocking miles on his favorite cycling routes. Dedicated to delivering sharp, insightful journalism in the fast-moving world of digital assets.
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