ASIC is suing Australia's largest comparison website over its crypto product providing unlicensed financial services.
👉 Background: Finder is the Australia's largest comparison website. In December 2021, Finder raised $30 million to grow its app and launch a crypto-based competitor to bank deposits.
👉 What happened: But last month, Finder announced it was shutting down its crypto product, named Finder Earn, which let customers invest in a stablecoin for a fixed return of just over 4% per annum.
👉 What else: A key reason for the shutdown? ASIC has Finder Wallet, a registered cryptocurrency exchange (and subsidiary of Finder.com) for providing unlicensed financial services. ASIC reckons this crypto product was more accurately a "debenture" - which is most certainly a financial product.
💡A debenture is a type of bond or debt that is unsecured, meaning you don’t have to put anything up like a house or car when taking one out.
💡Since debentures have none of this collateral, they rely on the creditworthiness and reputation of the company that issues it. For example, companies and governments regularly issue debentures to raise capital or funds.
💡So ASIC thinks Finder Earn was actually more like a debenture because customers deposited money with Finder Wallet on the understanding that their money would ultimately be repaid alongside its principle.
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