Block Earner’s Co-Founder:Charlie Karaboga
Regulating through enforcement actions often results in poor outcomes for both regulators and users, as it casts a negative light on industry companies, argued Charlie Karaboga, co-founder of Australian crypto startup Block Earner. He stressed that while regulators must protect consumers and investors, they should distinguish between malicious actors and genuine innovators in their enforcement efforts.
Karaboga’s remarks came shortly after an Australian Federal judge decided against imposing a financial service law penalty on Block Earner. According to a report by Bitcoin.com News, Judge Ian Jackman determined that the crypto startup acted “honestly and not carelessly” and should not face the AUD 350,000 fine sought by the Australian Securities and Investments Commission (ASIC).
Additionally, the court rebuked ASIC for issuing a misleading press release. Court documents indicated that the release falsely suggested that Block Earner was still violating financial service laws, leading to inaccurate media coverage of the February 9 judgment. Block Earner claimed this misrepresentation caused significant business losses.
In light of this, the judge not only relieved Block Earner of the penalty but also ordered ASIC to cover the startup’s legal costs incurred after the court’s February 9 ruling. This decision alleviated some financial strain on Block Earner, which had been adversely affected by ASIC’s misleading statements.
Reacting to the ruling, Karaboga acknowledged that while the decision was favorable for Block Earner, the damage had already been done. He noted that being taken to court by the regulator had created issues for the startup. However, he appreciated the judge’s positive remarks about Block Earner’s conduct during ASIC’s investigation.
“That sentence [of comments by the Australian Federal judge] was everything for me, because I don’t need to repeat myself in every single conversation with our partners,” Karaboga said.
Karaboga also expressed hope that the court’s decision not to penalize Block Earner would encourage ASIC to take a less aggressive approach. Stakeholders in Australia’s cryptocurrency market are optimistic that ASIC’s setback will prompt Parliament to establish “clear rules for everyone, allowing us to legitimately operate businesses here.”
He noted that Australia is progressing in regulating the cryptocurrency sector, with the consultation phase now concluded. He expects the first draft bill to be circulated in late 2024 or early 2025, assuming Parliament accelerates the process.
However, he cautioned that without clear regulations, participants in the Australian cryptocurrency market would be restricted to token sales only.
“So we can’t throw the utility of these assets or digital currencies or the blockchain technology without clear regulation, because anything that we do as an attempt creates this type of friction between us and the regulator,” Karaboga said.
