The service worked by allowing customers to deposit Australian dollars into Finder Earn, through Finder Wallet, to have it converted into dollar-denominated “stablecoin”, known as TrueAUD. It was then allocated back to Finder Wallet to use for its own working capital.

ASIC sought civil penalties for an alleged breach of product disclosure requirements, a failure to comply with design and distribution obligations, and for allegedly providing unlicensed financial services.

But the Federal Court’s Justice Brigitte Markovic dismissed the proceedings with costs because the watchdog was unable to establish Finder Earn was a debenture.

“Just as in my opinion there were no moneys deposited or lent, there was equally no undertaking by Finder Wallet to repay any moneys as a debt,” Justice Markovic determined in her judgment.

ASIC also failed to establish the terms of the Finder Earn product are not found in a “single source” but across the terms, the Finder app, the marketing material through the app, and “the individual customer’s investment of a certain amount for a particular time”.

Finder Wallet told the court the allocation did not create a debt owed to pay Australian dollars to the customers because the customer had entered into a contractual right to receive an amount of TrueAUD equivalent to their allocation at the end of their “earn term”.

Justice Markovic found this contractual promise existed within the terms of Finder Earn to return the TrueAUD to the customer, together with the return earned on that allocation over the earning term.

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“The customer made an investment in the Finder Earn product by allocating the customers’ TrueAUD to Finder Earn in exchange for the return,” Justice Markovic added.