FTX caused a major crisis in the cryptocurrency market. Recent news shows that it is not the only company experiencing a crisis in the market. Here are the details…
Finder sued over cryptocurrency
Finder.com is being sued by Australia’s financial services regulator for allegedly offering a cryptocurrency yielding product without the required license. It is the second local provider of crypto returns product targeted by the regulator, following the lawsuit filed against Block Earner in November. On December 15, the Australian Securities and Investment Commission (ASIC) filed a lawsuit against Finder.com’s subsidiary, Finder Wallet, a locally registered cryptocurrency service.
ASIC claimed that the Finder Earn product was an unlicensed financial product and violated Finder Wallet’s product disclosure requirements and failed to comply with its obligations regarding the targeted distribution of financial products. Finder Earn offered users an annual return of between 4.01% and 6.01% for depositing the stablecoin True AUD (TAUD) pegged to the Australian dollar. ASIC claimed that the product is a bond that requires an Australian Financial Services (AFS) license.
Clear message to the crypto space
He claimed that Finder Earn “exposed consumers to potential harm” because they may have been presented with an “unsuitable” product. Finder disagrees with this assessment. “Since the launch of Finder Earn in November 2021, we have proactively engaged with ASIC and fully cooperated with all ASIC information requests,” a spokesperson said.
A spokesperson for both ASIC and Finder.com said all user funds were fully refunded after Finder Earn ended. When asked if he would appeal the case, Finder said he would “not comment further as this matter is now in court.” “The message to the industry is clear – the fact that a proposal includes a crypto-asset-related product does not guarantee that it will fall outside the current regulatory regime,” Sarah Court, ASIC’s vice president, said in an announcement. ASIC’s lawsuit against Finder.com marks its third case in months against crypto financial products and the firms that provide them.
Silvergate impressed by FTX and Alameda drama
A class action lawsuit has been filed in the Southern District Court of California against Silvergate Bank, Silvergate Capital Corporation, and Silvergate CEO Alan Lane over accounts held by embattled crypto firms FTX and Alameda Research. The lawsuit aims to hold Silvergate liable for its alleged roles in depositing FTX user deposits into Alameda’s bank accounts.
The case was brought by plaintiff Joewy Gonzalez on behalf of himself and others in the same situation. According to the lawsuit, the plaintiff deposited their savings in crypto through the FTX exchange, as the platform promised investors that they could “safely store, cash out, or exchange assets as they increase in value.”
The lawsuit alleges that Silvergate aided and abetted FTX’s fraudulent activities and breaches of the exchanges’ fiduciary duty through improper transfers, borrower funds, and incoming funds. According to the lawsuit, Silvergate is responsible for its role in “advancing FTX’s investment fraud” and has an obligation to return its debts to the plaintiff and other investors.
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