Australian Securities and Investments Commission v Finder Wallet Pty Ltd

The Australian Securities and Investments Commission (ASIC) took action against Finder Wallet Pty Ltd in the Federal Court, asserting that Finder Wallet was operating a financial services business without a required Australian Financial Services Licence (AFSL). The central issue was whether Finder Wallet's "Finder Earn" product constituted a debenture under section 9 of the Corporations Act 2001 (Cth), which would require an AFSL. Finder Wallet argued that the Finder Earn product did not create a chose in action, as it was not a debenture, and therefore, it did not require an AFSL to operate. The court had to decide whether the Finder Earn product created a debt obligation that qualified as a debenture, which would necessitate an AFSL, or if it was merely a contractual promise to repay, which would not. The court examined the nature of the Finder Earn product and whether it created a debt obligation as defined by the Corporations Act.

The court determined that the Finder Earn product did not create a debt obligation as defined by the Corporations Act, and therefore, it was not a debenture. The court noted that a debenture requires the issuer to acknowledge the debt and undertake to repay it, which was not the case with Finder Wallet's Finder Earn product. Instead, the product created a contractual promise to repay, which did not require an AFSL. The court relied on the established definition of a debenture and the nature of the Finder Earn product to conclude that it did not fall under the definition of a debenture. Consequently, the court found that Finder Wallet did not need an AFSL to operate the Finder Earn product.

The Federal Court dismissed ASIC's proceeding against Finder Wallet, finding that the Finder Earn product did not constitute a debenture under the Corporations Act. The court ordered that the proceeding be dismissed and that ASIC pay Finder Wallet's costs as agreed or taxed. This decision clarified that the Finder Earn product did not require an AFSL, as it did not create a debt obligation that qualified as a debenture.