Finder.com, the financial product comparison website, is being sued by Australia’s financial services regulator for allegedly offering a cryptocurrency yield-bearing product without the required license.
It has been reported that it’s the second local provider of a crypto yield product to be targeted by the regulator, following action against Block Earner in November. The Australian Securities and Investments Commission (ASIC) began court proceedings on December 15 against Finder.com’s subsidiary Finder Wallet, a locally registered digital currency exchange.
However, ASIC alleged that the Finder Earn product was an unlicensed financial product and that Finder Wallet breached product disclosure requirements and failed to comply with obligations pertaining to distributing financial products in a targeted manner. Finder Earn offered users an annual yield of between 4.01% and 6.01% for depositing the Australian dollar-pegged stablecoin True AUD (TAUD).
The report said that ASIC claimed the product was a debenture, a debt instrument unbacked by collateral, which requires an Australian Financial Services (AFS) license. It claimed that Finder Earn “exposed consumers to potential harm” as they may have been offered a product “not suitable for them.” Finder disagrees with this assessment.
A Finder.com spokesperson said:
“We do not share ASIC’s view that Finder Earn can be regarded as a debenture. Since Finder Earn was launched in November 2021, we have proactively engaged with ASIC and have cooperated fully with all ASIC requests for information.”
Likewise, Finder Earn was “sunset” on November 24, which ASIC claimed was due to it notifying Finder Wallet of its concerns. The Finder.com spokesperson claimed the decision to discontinue the product “was a strategic business decision” due to increased interest rates and “not brought on by regulatory review.”
“We were in the process of this sunset when we were notified [ASIC] might take a closer look.”
Thus, both ASIC and Finder.com’s spokesperson said that all user funds were fully returned following the termination of Finder Earn. Finder said it “will not be commenting further as this matter is now before the courts” when questioned if it would contest the suit.