Australian Securities and Investments Commission v Web3 Ventures Pty Ltd

In the case of Australian Securities and Investments Commission v Web3 Ventures Pty Ltd, the court examined whether Web3 Ventures Pty Ltd, through its Block Earner services, operated an unregistered management investment scheme and carried on a financial services business without an Australian Financial Services Licence, in contravention of the Corporations Act 2001 (Cth). The dispute centred on the nature of the "Access" and "Earner" services provided by Block Earner, which involved cryptocurrency lending and yield generation through decentralised finance protocols. The primary legal issues revolved around whether these services constituted a managed investment scheme or a financial services business, and whether they required registration and a licence under the Corporations Act.

The court determined that the "Access" product constituted a contract for the future provision of services, thereby falling under an exemption from the definition of a derivative in section 761D(3)(b) of the Act. This exemption hinges on the primary purpose of the contract, which was found to be the provision of future services to facilitate cryptocurrency yield generation. Consequently, the "Access" product did not constitute a managed investment scheme or a financial service requiring a licence. On the other hand, the "Earner" product was found to contravene sections 601ED and 911A of the Act, as it operated as an unregistered management investment scheme and provided financial services without a necessary licence.

The court made declarations that the proceedings were dismissed in relation to the "Access" product but found in favour of ASIC regarding the "Earner" product. The court also reserved the costs of the proceedings to be determined at a later stage, concurrent with the decision on any pecuniary penalty. The case was scheduled for a case management hearing to prepare for a hearing on the penalty.