Block learner: key lessons from the Federal Court’s first crypto enforcement judgment

On 9 February 2024, the Federal Court handed down its judgment in Australian Securities and Investments Commission v Web3 Ventures Pty Ltd [2024] FCA 64 (ASIC v Web3 Ventures).

In summary, the court (Jackman J):

found in favour of ASIC that, in providing its fixed interest “Earner” product, Web3 Ventures Pty Ltd (Block Earner) contravened:
- section 911A of the Corporations Act 2001 (Cth) (Corporations Act) by carrying on a financial services business without holding an Australian financial services licence (AFSL); and
- section 601ED of the Corporations Act by operating an unregistered managed investment scheme; and
dismissed proceedings regarding Block Earner’s product which provided ‘access’ to a decentralised finance (DeFi) protocol, “Access”, on the basis that it was neither a managed investment scheme nor a facility by which a person makes a financial investment, and was not a derivative as it was a contract for the future provision of services, as objectively ascertained from the contractual terms and the substance of the contract.

Whilst the case turns on its facts and may well be appealed, the judgment reinforces the importance of carefully analysing the application of existing Australian financial services laws to all innovative products and services, including by reference to how they are described on any website, in other materials and communications, as well as the precise terms under which they are offered (irrespective of how the technology may be understood to operate).

Key takeaways

This is the first judgment in a series of proceedings commenced by the Australian Securities and Investments Commission (ASIC) against digital asset service providers that are expected to provide industry with guidance as to how the financial services regime can apply to digital asset products and services. We’ve distilled the key takeaways from this ruling and provided a short overview of the court’s findings.

The judgment reinforces a number of key considerations that providers of novel financial services, including digital asset product and service providers and new payment offerings, should keep front of mind. These include:

Ensure a clear legal structure: A clear, well-founded and enforceable legal structure that is consistent with the operation of the underlying technology of a digital asset offering, and compliance with obligations under the Australian financial services regime, are paramount. It is critical to maintain all appropriate licenses and authorisations.
Representations and marketing matter: All representations, communications, marketing materials and documents used in relation to products and services should be aligned with the legal terms and intended commercial structure of the products and services to maintain clarity, consistency and accuracy. The legal effect of representations, communications and marketing materials should be considered, as they can be material to the characterisation of a product or service under financial services laws even where they are inconsistent with the legal terms.
For example, in ASIC v Web3 Ventures, a reference to “pooling” in marketing materials was a focus in the judgment and had unfortunate consequences for Block Earner despite the Terms of Use not including a similar clause.
The Australian financial services regime can, and will, apply: The Australian financial services regime can apply to an entity, or product or service offering, even where the entity is only a technology service provider. The application of the Australian financial services regime is highly complex and fact dependent, and the regime applies to those carrying on a financial services business in Australia (even where services are provided from offshore), regardless of the underlying technology.
Consumer protection is key: Consumer protection for customers in digital assets remains a focus, including in relation to the risks, volatility and complexity which can exist for these products. Compliance obligations such as those under the design and distribution obligations and the unfair contract terms regime are important considerations. Even if products and services are outside the Australian financial services laws, the Australian consumer law may impose similar consumer protections including against unfair contract terms and misleading and deceptive conduct.
Broader regulatory landscape: Apart from financial services licensing, it is important to be aware of the licensing regimes applicable to financial markets, and clearing and settlement facilities, for new digital asset offerings, as well as other regimes, such as Australia’s anti-money laundering and counter-terrorism financing laws and sanctions laws.
Impact of future reforms: The Government has been consulting on various reforms that will impact the regulatory framework as it applies to digital asset products and services, payments, stablecoins and other areas of fintech. Participants in new and emerging areas of financial services, including the digital asset ecosystem, should carefully consider the interaction between these reforms and their impact on any particular offering.

As the digital asset industry continues to rapidly mature it can expect greater regulatory scrutiny. With ASIC calling for the digital asset industry to be held accountable to the same high standards expected of everyone else, providers of services which relate to digital assets would be wise to apply the lessons learned from the Block Earner judgment to ensure that they comply with Australia’s financial services laws.

If you have any questions in relation to the judgment, the application of the financial services regime to your activities or anything else, please reach out to the KWM team.

Read on for a rundown of the facts of the Block Earner case, and a summary of Jackman J’s findings in relation to Block Earner’s Earner and Access products.

ASIC v Web3 Ventures

On 23 November 2022, ASIC commenced proceedings in the Federal Court of Australia against Block Earner alleging it had contravened the Corporations Act in connection with two of its products, “Earner” and “Access”. ASIC alleged that:

each product was a managed investment scheme, a facility by which a person makes a financial investment, or a derivative;
Block Earner contravened section 911A of the Corporations Act by carrying on a financial services business without holding an AFSL covering the relevant financial services; and
to the extent either product is a managed investment scheme, Block Earner contravened section 601ED of the Corporations Act by operating an unregistered managed investment scheme.[1]

Block Earner’s products

ASIC’s case considered 2 products made available by Block Earner:

(a) Earner

The Earner product allowed users to ‘lend’ crypto assets to Block Earner in exchange for a fixed rate of return over the term of the loan. Block Earner either converted the user’s Australian dollars (AUD) into crypto assets which were held and aggregated in a digital crypto asset address controlled by Block Earner or the user transferred crypto assets directly to that address. These crypto assets were lent to third parties at a higher interest rate. At the end of the loan, the user was entitled to a return of AUD from Block Earner calculated by reference to the price of the relevant crypto asset, plus a fixed rate of return which was sourced from the higher yield generated by Block Earner from lending the aggregated crypto assets.

(b) Access

The Access product provides users with streamlined access to the Aave and Compound protocols, each being a smart contract governed lending protocol that allows users to lend their crypto assets and earn interest at a rate adjusted by the supply and demand for the crypto asset. Using Access, users convert AUD to crypto assets. Block Earner aggregates the crypto assets of all users in an omnibus digital asset wallet held by Block Earner on behalf of users, who the judgment states retain ownership of their crypto assets at all times. Users earn yield in the form of another crypto asset, on their crypto assets in the DeFi protocol, which is passed on by Block Earner.

Decision

The court found that the Earner product was a managed investment scheme and a product for making a financial investment, and as a result, Block Earner contravened:

section 911A (1) and (5B) of the Corporations Act by carrying on a financial services business without an AFSL; and
section 601ED(5) and (8) of the Corporations Act by operating an unregistered managed investment scheme.

However, his Honour found the Access product was:

neither a managed investment scheme nor a product for making a financial investment; and
not a derivative as it was a contract for the future provision of services, as objectively ascertained from the contractual terms and the substance of the contract, and

Block Earner did not contravene the relevant sections of the Corporations Act in this respect.

Further detail in relation to Jackman J’s reasons is set out in the table below.

Financial product	Earner	Access
Managed investment scheme[2] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Earner is a managed investment scheme ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Access is not a managed investment scheme ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
A managed investment scheme means a scheme that has the following features: ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. The court found there was a scheme in relation to Earner.[3] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. The court found there was a scheme in relation to Access.[4] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
(i) people contribute money or money’s worth as consideration to acquire rights to benefits produced by the scheme; and ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. Users “contributed money or money’s worth jointly with all other users, as consideration to acquire the right to the promised fixed interest yield under the Earner product which Block Earner represented it would be able to pay because of the benefit produced by the scheme of enabling Block Earner to earn revenue in a greater amount by deploying the pooled contributions from users (as well as its own cryptocurrency) in lending the aggregated cryptocurrency to third parties at a higher rate.”[5] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Not satisfied. Users did not “contribute” money or money’s worth on the basis that: from the user's perspective, the money which a user paid to Block Earner for the Access product, and the financial performance of the tokens purchased with it, were treated on an individuated basis; such contributions were not provided “jointly with others or to furnish a common fund”; and users retained “ownership” over their crypto assets at all times.[6] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
(ii) any of the contributions are to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in property, for the people (the *members*) who hold interests in the scheme (whether as contributors to the scheme or as people who have acquired interests from holders); and ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. This was met on the basis that: contributions made by users were to be pooled. While the Terms of Use did not mention pooling for any common benefit, Block Earner represented on its website that contributions would be pooled in order to generate a financial benefit for users;[7] and the payment of fixed yield to users was obviously a financial benefit to them. So too was Block Earner’s capacity to earn revenue from which that fixed yield would be paid.[8] Note that Block Earner required users to acknowledge that they “did not intend for Block Earner to use the loaned Eligible Cryptocurrency to generate a financial benefit or act as an investment for you”[9], which was inconsistent with representations on the website. These inconsistencies were reconciled by interpreting the acknowledgement, to mean that “Block Earner would not pass on to users the amount of the return which it earned by dealing in the cryptocurrency which users had lent to it, but would receive only the fixed yield promised to them, irrespective of the amount of revenue which Block Earner was able to earn from its dealings with third parties.”[10] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Not satisfied. The word “to” in the expression “any of the contributions are to be pooled … to produce financial benefits … for the people … who hold interests in the scheme” requires there be a purposive link between the contributions that are pooled and the production of financial benefits.[11] ASIC did not establish any link between the pooling in the omnibus account and the financial benefits, being the saving in account fees. Instead, the saving in account fees was a benefit to Block Earner and not to users, and the court found no evidence that this benefit was ever disclosed to users. Accordingly, there was no basis from which it could be inferred that users objectively intended that their payments would be pooled to produce financial benefits for them in this way.[12] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
(iii) the members do not have day‑to‑day control over the operation of the scheme (whether or not they have the right to be consulted or to give directions). ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. Block Earner controlled and operated the scheme. A user’s ability to control when they entered into and withdrew from a scheme did not constitute day to day control of the operation of the scheme.[13] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. As with the Earner product, a user’s ability to control when they entered into and withdrew from the scheme did not constitute day to day control of the operation of the scheme.[14] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
Derivative [15] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Earner is not a derivative ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Access is not a derivative The Access product is a contract for the future provision of services and is therefore exempt from being a derivative.[16] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
A derivative is an arrangement in relation to which the following conditions are satisfied: under the arrangement, a party to the arrangement must, or may be required to, provide at some future time consideration of a particular kind or kinds to someone; and that future time is not less than the number of days, prescribed by regulations made for the purposes of this paragraph, after the day on which the arrangement is entered into; and the amount of the consideration, or the value of the arrangement, is ultimately determined, derived from or varies by reference to (wholly or in part) the value or amount of something else (of any nature whatsoever and whether or not deliverable), including, for example, one or more of the following: an asset; a rate (including an interest rate or exchange rate); an index; a commodity. ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Not satisfied. The Earner product is not a derivative as it is an interest in an unregistered managed investment scheme that has more than 20 members which is excluded from the definition of derivative.[17] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Jackman J noted there is “considerable force”[18] in ASIC’s submissions that the Access product was a derivative as, under the arrangement, the amount of “yield” a user is repaid in AUD, will vary according to the value of the crypto asset acquired with the AUD and the value of another crypto asset into which those acquired crypto assets are converted.[19] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
(3) None of the following is a derivative even if covered by subsection (1): …(b) a contract for the future provision of services; ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	*Not applicable* ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied This exemption requires focus on the purpose or object of the contract, objectively ascertained from the contractual terms, and involves looking at the substance of the contract.[20] The court found that the primary, if not the only, subject matter of the Access product was the future provision of services, being streamlined access to DeFi protocols. The future provision of those services could not be regarded as merely incidental or ancillary to some other purpose.[21] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
Facility by which a person makes a financial investment (Investment Facility)[22] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Earner is an Investment Facility ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Access is not an Investment Facility ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
A person (the investor) makes a financial investment if the investor gives money or money’s worth (the contribution) to another person and any of the following apply:[23] (i) the other person uses the contribution to generate a financial return, or other benefit, for the investor; or ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. The court found that the Earner product was an Investment Facility as Block Earner “used the money or money’s worth given to it by the investors to generate a financial return or other benefit for the investors, by generating revenue from which it would be able to pay the fixed yield which it was legally obliged to pay. That involved a financial return or other benefit for the investors even if the revenue generated by the use of the contribution was in a higher amount, thereby enabling Block Earner to make a profit.”[24] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Not satisfied. The court did not consider that this was met, as “Block Earner is doing no more than providing services which involved, in the first place, exchanging AUD for cryptocurrency, and second, connecting users’ cryptocurrency to smart contracts on DeFi protocols to earn yield. Block Earner does nothing with the cryptocurrency other than deposit it into a smart wallet connected to the applicable DeFi protocol on instructions from the user.”[25] Instead, Block Earner was found to be effecting transactions on behalf of its users, and those users were themselves using money or money’s worth to generate a financial return or other benefit for themselves.[26] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
(ii) the investor intends that the other person will use the contribution to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated); or ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. Whilst there was no evidence demonstrating the investors’ intention and, despite the acknowledgement in the Terms of Use that the user did not intend for Block Earner to use the loaned crypto assets to generate a financial benefit or act as an investment for the user, the court inferred that due to the prominence of the representations on Block Earner’s website, the investors did intend that Block Earner use their contributions to generate a financial return or other benefit.[27] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Not satisfied. There was no evidence that investors or Block Earner intended that the contributions would be used to generate a financial return or other benefit for the investor. Instead, the relevant intention as inferred from the evidence, is that investors themselves would be using their money or money’s worth to generate a financial return or benefit for themselves.[28] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].
(iii) the other person intends that the contribution will be used to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated). ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Satisfied. This was satisfied for the same reasons as (i) above.[29] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].	Not satisfied. This was not satisfied on the same basis as (ii) above.[30] ASIC amended its Originating Process and Concise Statement on 21 March 2023 to include pleadings in relation to the Access product. Corporations Act, s 9 (definition of “managed investment scheme”). ASIC v Web3 Ventures [37]. ASIC v Web3 Ventures [67]. ASIC v Web3 Ventures [40]. ASIC v Web3 Ventures [68]. ASIC v Web3 Ventures [42]-[43]. ASIC v Web3 Ventures [42]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [43]. ASIC v Web3 Ventures [69]. ASIC v Web3 Ventures [69]-[71]. ASIC v Web3 Ventures [44]. ASIC v Web3 Ventures [72]. Corporations Act, s 761D. Corporations Act, s 761D(3)(b). Corporations Act, ss 761D(3)(c), 764A(1)(ba) and 601ED(1). ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. ASIC v Web3 Ventures [84]. Corporations Act, s 763B. ASIC v Web3 Ventures [50]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [75]. ASIC v Web3 Ventures [52] – [53]. ASIC v Web3 Ventures [77]. ASIC v Web3 Ventures [51]. ASIC v Web3 Ventures [51].