Mackay Chapman May 2025 ASIC Update

In this month’s ASIC update:

• Block Earner wins appeal court case over crypto product licence
• ASIC explains how to apply for eligible applicant authorisation
• ASIC is launching a new digital portal for AFS licence applications
• Federal Court rules Green County and Max Funding engaged in unlicensed lending
• ASIC warns of scammers impersonating ASIC Connect
• ASIC consults on plan to increase visibility of firms’ breach and complaints data
• ASIC warns of threat from “hydra-like” scammers after obtaining court orders to shut down 95 companies
• Financial services provider penalised $11 million over “cookie-cutter” advice and conflicted bonus

Keep reading for more information and key details.

Block Earner wins court case over crypto product licence

The Full Federal Court has ruled that Block Earner didn’t need a financial services licence to offer its fixed-yield crypto product, "Earner." This decision overturns an earlier ruling that the product involved the provision of a financial service and required a licence.

ASIC had appealed the case, hoping to impose penalties, but the court disagreed. As the Full Court held Earner was not a financial product and therefore Block Earner did not provide a financial service in offering or delivering the product, there was no need to decide on any penalties. ASIC was ordered to pay Block Earner’s legal costs.

This case is important for crypto, lending and innovative fintech businesses. It clarifies what does (and doesn’t) require a licence under Australian law. 

However, ASIC applied for special leave to appeal to the High Court in late May 2025.  The High Court has not yet listed the application for special leave.

This is becoming a more and more significant matter given the limited amount of appellate, let alone High Court, jurisprudence on the definition of financial service and financial product.

Fintechs and financial services participants, and financial services lawyers, watch this space.

ASIC explains how to apply for eligible applicant authorisation

ASIC has released a new guide – INFO 293 – that describes how people or businesses can become eligible applicants under the Corporations Act. 

This status allows them to ask a court to run or participate in public examinations of companies in external administration (like liquidation).

The guide covers who can apply, what ASIC considers when deciding, and what paperwork, fees, and steps are involved. It also outlines the relevant sections of the law, including sections 596A, 596B, and 597.

This guide is important for insolvency practitioners and their lawyers, or parties involved in or impacted by insolvencies or corporate investigations.

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ASIC is launching a new digital portal for AFS licence applications

On 5 May 2025, ASIC launched a new online portal to apply for, change, or cancel an Australian Financial Services (AFS) licence. This is part of ASIC’s move towards a more modern and user-friendly digital system.

The new portal won’t change who’s eligible or what information is needed—but it will make the process smoother. It’ll pre-fill known info, tailor questions to each user, and collect key details upfront. This should help reduce delays and make it easier for licensees to manage their obligations.

ASIC will also update its AFS Licensing Kit (Regulatory Guides 1–3) to reflect the new system’s design, not the underlying policies. Guidance and support materials are available on ASIC’s website.

Federal Court rules Green County and Max Funding engaged in unlicensed lending

The Federal Court has found Green County Pty Ltd and Max Funding Pty Ltd guilty of unlicensed credit activity after providing loans to two consumers. The Court ruled that Green County did not properly verify that the loans were for business purposes, as required under the Credit Code.

In one case, the Court said the lenders should have made reasonable inquiries to confirm the purpose of the loan. Without this, the loan was deemed a consumer loan, and the borrowers missed out on important consumer protections.

While the Court cleared Green County’s director, Ivy Tang Gy Ng, of breaching her duties, the case highlights the need for businesses to follow proper licensing rules and processes designed to protect consumers from financial harm. 

ASIC is continuing its crack down on unlicensed credit activity.

ASIC warns of scammers impersonating ASIC Connect

ASIC has issued a scam alert about fake websites pretending to be ASIC Connect. Scammers are setting up websites with domain names similar to ASIC’s official addresses, hoping to trick consumers into sharing personal or financial details.

Always double-check that you're visiting the official ASIC website (asic.gov.au, connectonline.asic.gov.au, or asicconnect.asic.gov.au) to stay safe. If you’ve encountered a scam website, report it to ASIC. If you've already been scammed, stop any payments, contact your bank, and report it to Scamwatch and seek legal advice to see if you can get your money back.

Be cautious, and always ensure you engage with genuine ASIC pages when online.

ASIC consults on plan to increase visibility of firms’ breach and complaints data

ASIC seeks feedback on plans to publish dashboards displaying firm-level Reportable Situations (RS) and Internal Dispute Resolution (IDR) data later in 2025. 

The aim is to boost transparency, encourage better performance, and empower consumers with access to critical information.

Stakeholders can provide feedback by 14 May 2025. The publication of this data is expected to highlight areas of concern, such as breaches and complaints, and help improve both consumer and firm outcomes in the financial sector.

ASIC warns of threat from “hydra-like” scammers after obtaining court orders to shut down 95 companies

ASIC has successfully applied to wind up 95 companies linked to online investment and romance baiting scams. 

These companies, many incorporating false details, were believed to facilitate fraudulent trading activities like foreign exchange and cryptocurrency scams.

The Federal Court's ruling marks a significant step in cracking down on scammers who use professional-looking websites and apps to deceive consumers. ASIC continues to work against these scams, taking down over 130 websites weekly.

ASIC warns that, like hydras, new ones emerge for every scam company shut down. Consumers must remain vigilant against increasingly complex online fraud tactics.

Financial services provider penalised $11 million over “cookie-cutter” advice and conflicted bonus

The Federal Court has fined DOD Bookkeeping Pty Ltd (formerly Equiti Financial Services Pty Ltd) $11 million after it was found to have breached conflicted remuneration laws. 

The financial services provider incentivised advisers with bonuses of over $130,000 for giving "cookie-cutter" advice, pushing clients to roll over their superannuation into self-managed super funds (SMSFs) and buy property through a related company.

The Court ruled that the advice provided failed to account for each client’s needs, resulting in poor financial outcomes. 

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The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.