The Australian financial watchdog has filed a lawsuit against Finder Wallet for breaching consumer protection regulations.
The Australian Securities and Investments Commission (ASIC) sued the entity of Finder.com for providing unlicensed financial services related to crypto products, according to a Reuters report.
Fine print of the lawsuit
In a Federal Court complaint, ASIC accused Finder Wallet of encouraging customers to deposit money into accounts. Furthermore, turning these deposits into “stablecoins”, and then promising fixed returns. The comparison website allegedly sold the bond product without a financial services licence.
In its court case, ASIC stated that users of Finder.com “made uninformed (or insufficiently informed) investments. Which in turn exposed them to a risk of loss” since they “did not have the benefit of the regulatory regime.”
In addition, ASIC Deputy Commissioner Sarah Court stated that just because an offer contains a product related to crypto-assets does not mean that it will be exempt from the current regulations.
In contrast, a spokeswoman for Finder.com told Reuters the company disagrees with ASIC’s assessment that Finder Earn qualifies as a promissory note. The company’s representative also claimed that all client funds were returned when the product was discontinued in November.
Australia’s crypto sector sees increased legal action
The lawsuit against Finder is apparently ASIC’s third legal action against a provider of crypto-related products in the past two months.
Recently, Binance’s Australian unit was fined $2 million for sending unsolicited emails to customers. The Australian Communications and Media Authority (ACMA) recently discovered that Binance Australia sent over 5.7 million promotional emails. In addition, the platform must have made it challenging for customers to unsubscribe from the email list.
Last month, the Australian Financial Services Authority sued Block Earner for providing unregistered cryptocurrency services.
Meanwhile, in the coming year, Australia is reportedly planning to create a crypto framework. It will include a regime for the licensing of cryptocurrency service providers, along with other regulations in the sector. According to a statement released by Stephen Jones MP, Assistant Treasurer and Minister for Financial Services, the government plans to strengthen the financial market and payment infrastructure in 2023.
In particular, Australia is a crucial crypto economy that is ranked in the top 20 markets. Therefore, its legislative plans will also have a major impact on a global scale.
Regulatory overhaul in the country
The statement indicates that a consultation document will be released in early 2023. Which will determine whether financial services laws should regulate digital assets. Also, the next step in Australia’s ongoing “token mapping” efforts is to create appropriate custody and licensing arrangements to protect consumers.
Another report from Bloomberg highlighted that Australia could bring significant changes to its financial services legislation that would tighten security measures for the cryptocurrency market.
According to ongoing discussions, the government is reportedly investigating whether the country’s financial laws should govern cryptocurrency tokens.
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