Search Results for: pre-selling

Bank CEOs Defend P2P Payments Network Zelle in Senate Hearing Over Consumer Fraud Handling

BankingDive | Anna Hrushka | Sep 23, 2022

Ms Warren at Zelle senate hearing - Bank CEOs Defend P2P Payments Network Zelle in Senate Hearing Over Consumer Fraud HandlingSen. Elizabeth Warren, D-MA, called the peer-to-peer payments network “unsafe,” claiming Zelle users were defrauded out of $500 million last year.

“You have created a perfect weapon for criminals to use and they have used it and you have not stood behind your customers,” she told the witnesses, which included the CEOs of JPMorgan Chase, Bank of America, Wells Fargo, Citi, Truist, PNC and U.S. Bank.

  • Zelle, a network designed to compete with P2P fintechs such as Venmo and Cash App, is owned by six of the seven banks represented at Thursday’s Senate Banking Committee hearing.
  • Senate Democrats on Thursday pressed the CEOs of the nation’s largest retail banks to answer for scams associated with Zelle, a bank-owned peer-to-peer payments network, calling for the institutions to implement policies to protect and redress customers defrauded through the platform.

See:

Asset Managers, Banks Are Tightening Controls of Communication Tools like WhatsApp

Some New Banking Rules Implemented to Protect Consumers in Canada

  • In a joint letter sent to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra in April, the Democratic lawmakers called on the regulator to expand the definition of “error payments” to include payments a consumer makes to a scam artist.  The lawmakers also called for the CFPB to issue guidance that would place the burden on banks to make consumers defrauded by such transactions whole.
  • JPMorgan CEO Jamie Dimon, who is no stranger to fiery exchanges with Warren, said his bank reimburses customers whose accounts have been hacked, a policy banks follow under Regulation E. Anything that’s unauthorized, we do cover,” Dimon told the senator, adding the amount of fraud on Zelle is “relatively small.”

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NCFA Jan 2018 resize - Bank CEOs Defend P2P Payments Network Zelle in Senate Hearing Over Consumer Fraud HandlingThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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a16z Leads $51.5M Series B to Catch Fishy Fintech Transactions

TechCrunch | Anita Ramaswamy | Sep 20, 2022

Fishy transactions - a16z Leads $51.5M Series B to Catch Fishy Fintech Transactions

Image: Unsplash/Oziel Gómez

Sardine announced it has raised $51.5 million in a Series B round led by Andreessen Horowitz’s (a16z) Growth Fund after closing $19.5 million for its Series A earlier this year.  “Faster instant payments mean faster fraud,” Sardine CEO and co-founder Soups Ranjan told TechCrunch. That’s the thesis behind his startup, which uses behavioral, financial and device-specific user data to detect fraud on behalf of its clients in the crypto and fintech industries.

  • Growth: Sardine has grown considerably since it announced the Series A back in February, growing its roster of clients from ~50 to ~135 today, Ranjan said. Its customers include crypto exchanges FTX and Blockchain.com as well as fintechs with broader mandates such as Wealthsimple and Digit, he added.

See:  Consumer Protection: Fintech Complaints Have Been Rising

  • Differentiators:
    • Sardine’s differentiation in the market as stemming from his team’s experience and the company’s focus on fintechs.
    • Another major differentiator from competitors like Socure is its instant ACH and card onramp to crypto, which allows its customers to purchase over 30 different crypto assets instantly.
      • Banks and card issuers typically use fraud detection algorithms for crypto that aren’t nearly granular enough.  Around half of the customers who attempt to transact using fiat-to-crypto onramps through traditional platforms are declined as fraudulent.
    • It also offers direct fiat to NFT checkout in partnership with Tom Brady’s company, Autograph, and plans to expand that product to other NFT marketplaces, according to Ranjan.
  • Competition: Sardine does have competition from other startups in the identity-verification space, such as Socure, which told TechCrunch last year that it counts three of the top five global banks as customers.

See:  Microsoft announces plan to cut cybersecurity workforce shortage in half by 2025

Soups Ranjan, CEO and co-founder Sardine:

One of the reasons why folks haven’t dabbled or launched ACH to crypto, or even direct ACH to NFT, has been that there is no one [else] taking on the fraud risk liability.  The platform allows customers to access some, but not all, of their crypto instantly.  Sardine is taking on the fraud risk. [The transaction] typically settles into two-plus days, so for that period of time, we’re taking on the settlement risk, and we’re taking on the third-party fraud risk, as in, if somebody connects a stolen bank account.

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NCFA Jan 2018 resize - a16z Leads $51.5M Series B to Catch Fishy Fintech TransactionsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Quebec’s Draft Regulation on Confidentiality Incidents

Clyde&Co | Sep 21, 2022

Quebec Draft regulation on confidentiailty incidents - Quebec's Draft Regulation on Confidentiality IncidentsOn June 29, 2022, the Quebec government presented the draft Regulation respecting confidentiality incidents (the “Quebec Regulation”). The Quebec Regulation specifies the content of the new notification and record-keeping requirements following the occurrence of a confidentiality incident. The regulation is set to enter into force on September 22, 2022, along with the first amendments to Quebec's Act respecting the protection of personal information in the private sector (the “Private Sector Act”), following the adoption of Bill 64,  An Act to modernize legislative provisions as regards the protection of personal information (“Bill 64”).

See:  5 Billion Profiles: Class Action Lawsuit Accuses Oracle of Privacy Breach and “Global Surveillance”

  • Bill 64 received assent on September 22, 2021, which marked the start of Quebec's transition into modernizing the rules that apply to the protection of personal information. We recently published an insight which provides an overview of the amendments that Bill 64 is bringing along for the next few years.
  • What is a confidentiality incident? As amended by Bill 64, Section 3.6 of the Private Sector Act provides the following definition of a “confidentiality incident”:
    • access not authorized by law to personal information;
    • use not authorized by law of personal information;
    • communication not authorized by law of personal information; or
    • loss of personal information or any other breach in the protection of such information.

See:  Modernizing Privacy Law in Canada – Striking the Right Balance

Requirements coming into force on September 22, 2022

  • In Canada, subject to some sector-specific exceptions, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) applies to all private-sector organizations unless a province has enacted its own privacy laws that are substantially similar to PIPEDA (currently Alberta, British Columbia and Quebec), in which case the provincial legislation applies.
    • In provinces with substantially similar legislation, PIPEDA will still apply to personal information collected through interprovincial and international transactions.
  • No mandatory reporting and notification requirements existed under the Private Sector Act until the recent Bill 64 amendments.
  • As of September 22, 2022, Quebec’s mandatory notification regime for confidentiality incidents in the private sector will become the third one along with the federal and Alberta regimes in Canada outside the sector-specific regimes.
  • Organizations subject to the Private Sector Act will therefore have to comply with new requirements in the handling of such events.

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NCFA Jan 2018 resize - Quebec's Draft Regulation on Confidentiality IncidentsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Three ways open banking could impact wealth management

Investment Executive | Greg Meckbach | Sep 16, 2022

Fintech open banking - Three ways open banking could impact wealth management

Image: 123RF

Open banking — available in Britain but not yet in Canada — is when a financial institution shares client account details (with consent) with a third party, without the client having to share their login name and password.   In 2021, a government-appointed advisory committee recommended that open banking be up and running by January 2023.

In the committee’s proposed initial phase, third-party service providers (such as fintechs) should be able to read data from clients’ chequing and savings accounts, investments accounts, RRSPs, TFSAs and non-registered accounts that hold stocks, bonds, mutual funds and GICs, the committee said in its final report. Open banking should be mandatory for federally regulated banks and optional for provincially regulated institutions and “other entities,” the report added.

  • Fee comparison:  Armed with such data, a third-party fintech could potentially tell a consumer how much they could save on fees, said Stephanie Holmes-Winton, CEO and founder of Halifax-based fintech CacheFlo Inc. Through open banking, a fintech could learn that a client has multiple accounts at different institutions with similar investments in them. The fintech could then compare the fees, Holmes-Winton said.

See:

Canada’s Open Banking Journey: Interview with EY’s Dr. Francesco Pisani and Dr. Alexander Christoph

Canada’s Open Banking Working Committees Flag ‘Governance’ as the Latest Gap

  • Risk tolerance/matching:  Getting a complete picture of a client’s investments has other benefits. For example, a fintech could determine whether all of a client’s investments put together (as opposed to at just one institution) match their risk tolerance, Holmes-Winton suggested.
  • KYC automation: Open banking could also speed up know-your-client (KYC) processes, said Darcy Ammerman, partner and banking regulation lawyer with McMillan LLP. This is because a third party with access to a consumer’s banking data could potentially automate the process of filling out KYC forms.

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NCFA Jan 2018 resize - Three ways open banking could impact wealth managementThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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CFTC Enforcement Action Against Ooki DAO Outrages One of Its Own Commissioners (and Crypto)

The Defiant | Owen Fernau  | Sep 22, 2022

CFTC - CFTC Enforcement Action Against Ooki DAO Outrages One of Its Own Commissioners (and Crypto)Agency Alleges Ooki DAO Offered Derivatives Without a License

In a case that has roiled the crypto community and triggered a dissent from one its own officials, the U.S. Commodity Futures Trading Commission (CFTC) brought an enforcement action yesterday that challenges fundamental tenets of decentralized finance.

On Sept. 22, the regulator alleged in a lawsuit that a DAO called Ooki DAO engaged in activities that only regulated entities called futures commission merchants (FCM) can perform. The DAO illegally offered leveraged and marginal retail commodity transactions in digital assets, which are derivatives, and agreed to pay a $250,000 penalty, the CFTC said. The commission also named the venture’s founders, Tom Bean and Kyle Kistner, in the suit.

See:  New U.S. Bill Gives Crypto Oversight to the CFTC

The CFTC’s actions suggest that calling an entity a DAO, or invoking token-based voting as part of an organization’s decision-making process, doesn’t necessarily protect that entity from the legal responsibilities of a traditionally regulated institution.

CFTC Commissioner Summer Mersinger - broke rank with her five fellow commissioners and said:

The action wasn’t supported by the Commodity Exchange Act, the law that regulates derivatives inssuance, and amounted “regulation by enforcement.  I cannot agree with the Commission’s approach of determining liability for DAO token holders based on their participation in governance voting for a number of reasons (said in a statement). While I do not condone individuals or entities blatantly violating the [law] or our rules, we cannot arbitrarily decide who is accountable for those violations based on an unsupported legal theory amounting to regulation by enforcement while federal and state policy is developing.

See: 

Gary Gensler, Chairman of the SEC Speech

Sheriff Gensler of ‘Wild West’ Cryptoville Has Drawn His Guns

Gretchen Lowe, the CFTC’s acting director of enforcement, said in a statement:

Margined, leveraged, or financed digital asset trading offered to retail U.S. customers must occur on properly registered and regulated exchanges in accordance with all applicable laws and regulations.  These requirements apply equally to entities with more traditional business structures as well as to DAOs.

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NCFA Jan 2018 resize - CFTC Enforcement Action Against Ooki DAO Outrages One of Its Own Commissioners (and Crypto)The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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FrontFundr Launches Its Own Fundraising Campaign to Raise Up to $5M | Open to the Public Until Nov 4

Betakit | Josh Scott | Sep 21, 2022

FrontFundrs team Sep 2022 - FrontFundr Launches Its Own Fundraising Campaign to Raise Up to $5M | Open to the Public Until Nov 4FrontFundr has launched its own fundraising campaign on FrontFundr, which the company said will remain open to the public until November 4.

  • Toronto-based FrontFundr has announced that it has helped startups raise over $140 million across more than 100 fundraising campaigns using its equity crowdfunding platform.
  • Since Canadian regulators introduced harmonized crowdfunding rules across Canada, making equity crowdfunding more accessible, Van Hoeken has seen its popularity rise, especially as broader economic conditions have worsened.
  • So far, FrontFundr has raised a total of $7.3 million CAD from over 900 investors. The company aims to raise another $2.5 million to $5 million through its latest offering to support its product development plans and boost its sales.
  • To date, FrontFundr has built a community of more than 30,000 users. The startup’s platform has helped Canadian tech startups like Manzil, Caary, and FrontFundr itself raise capital.
  • Van Hoeken also sees a future where FrontFundr can help more public companies raise money using its platform. Over the longer-term, FrontFundr has ambitions to “spread [its] wings” across North America and into the United States.

See:  Fintech Fridays EP57: 10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act

Peter-Paul Van Hoeken, Founder/CEO, FrontFundr:

As interest rate increases restrict available capital, more founders and growth stage companies will be looking at alternative financing options to bolster their available capital options along different funding stages, from pre-seed and seed to Series A. Investment crowdfunding offers founders an attractive and viable alternative or additional source of funding to traditional angel and VC investment. As a result, we’ve seen an increasing amount of funding raised through investment crowdfunding.

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NCFA Jan 2018 resize - FrontFundr Launches Its Own Fundraising Campaign to Raise Up to $5M | Open to the Public Until Nov 4The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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CoinSmart Announces Acquisition by Coinsquare

Coinsmart | Release | Sep 22, 2022

Coinsmart - CoinSmart Announces Acquisition by CoinsquareTORONTO, Sept. 22, 2022 /CNW/ - CoinSmart Financial Inc. ("CoinSmart" or the "Company") (NEO: SMRT) (FSE: IIR), announced today that it has entered into a definitive agreement dated September 22, 2022 (the "Purchase Agreement") with Coinsquare Ltd. ("Coinsquare"), a leading Canadian crypto asset trading platform, pursuant to which CoinSmart has agreed to sell to Coinsquare all of the issued and outstanding shares of its wholly-owned operating subsidiary Simply Digital Technologies Inc. ("Simply Digital") (the "Transaction").

  • The acquisition and integration of these two businesses will establish Coinsquare as one of Canada's largest crypto asset trading platforms with a diversified and compliant offering across various business lines, including both retail and institutional trading, crypto payment processing, and digital asset custody.
    • CoinSmart will hold approximately 12% ownership in Coinsquare on a pro-forma basis.
    • The combined company has transacted over $10 billion since January 2018, and will have over $350 million in assets under custody with a combined user base in excess of 1 million.

See:  FINTECH FRIDAY$ (EP23-Feb 1): Getting Smart About Crypto and Insurtech Snapchat Models – Interview with Justin Hartzman, Co-founder and CEO of Coinsmart Crypto Exchange

  • CoinSmart Co-Founders Justin Hartzman, Jeremy Koven, and Michael Koral, amongst others, will join Coinsquare. Justin Hartzman will join the Coinsquare Executive Team and CoinSmart will be entitled to a nominee to join the Coinsquare Board of Directors upon completion of the Transaction.
  • Acquisition of Cash and Shares with Upside to Shareholders: consideration payable to CoinSmart at closing of $3 million in cash, and the issuance of 5,222,222 common shares of Coinsquare ("Coinsquare Shares"), with an aggregate deemed value of approximately $26,215,555, plus the ability to receive up to approximately $20 million in additional cash consideration on the achievement of SmartPay business earn-out targets and 1,100,000 Coinsquare Shares on the achievement of over-the-counter ("OTC") business earn-out targets. It is further anticipated that CoinSmart will hold cash (or crypto assets) of approximately $10 million on completion of the Transaction.

"Today is an exciting day for all of us at CoinSmart," said CoinSmart CEO Justin Hartzman. "We are thrilled to be working alongside the Coinsquare team to build one of the largest regulated crypto asset trading platforms in Canada and I could not be more proud of what we have accomplished so far. With a diversified product suite, exceptional crypto talent, and one of the largest user bases in Canada, the combined company will be well-positioned to pursue its aggressive expansion plans. While the crypto market is in the building phase of its life cycle, this transaction will provide the torque needed to be in a favourable position entering the next bull run."

View the original release --> here


NCFA Jan 2018 resize - CoinSmart Announces Acquisition by CoinsquareThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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