Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs
SEC Files Lawsuit and Accuses Kraken of Commingling
Crypto Enforcement | Nov 21, 2023
Image: Unsplash/Bryan Burgos
The SEC has filed a lawsuit accusing Kraken of operating as an unregistered platform and improperly mixing customer funds with corporate assets.
This move echoes previous actions taken by the SEC against other major exchanges like Coinbase and Binance. Kraken, a prominent crypto exchange, has become the latest target of the U.S. Securities and Exchange Commission (SEC).
SEC Allegations
According to the SEC, Kraken has not only operated as an unregistered broker, clearing agency, and dealer but has also commingled up to $33 billion in customer crypto with its corporate assets. The SEC's lawsuit seeks to permanently ban Kraken from operating as an unregistered exchange and demands a fine along with the return of any ill-gotten gains.
Kraken Stands Firm and Criticizes SEC
Kraken stands firm in its disagreement with the SEC's allegations. The exchange asserts that it does not list securities and plans to vigorously defend its position. Kraken emphasizes the lack of regulatory clarity in the U.S. and criticizes the SEC's approach of "regulation by enforcement," which it believes harms American consumers, stifles innovation, and undermines U.S. competitiveness globally.
See: Kraken’s Strategy for Canadian Market Growth
In its blog post, Kraken outlines its stance, highlighting that the SEC's complaint does not allege fraud, market manipulation, customer losses due to hacking, compromised security, or breaches of fiduciary duty. Kraken argues that the SEC's claim of "commingling" is a misrepresentation, as it merely involves the use of fees already earned by the exchange.
Kraken also points out the legal precedents where courts have rejected the SEC's theory that digital assets traded on platforms are securities transactions. The exchange believes that the current lawsuit will fail for similar reasons. Kraken emphasizes that there is no legal framework for registering as an exchange, broker-dealer, or clearing agency for investment contracts, as demanded by the SEC.
Committed to Accelerating Crypto Adoption
Amidst this legal battle, Kraken remains committed to its mission of accelerating cryptocurrency adoption and ensuring financial freedom and inclusion.
See:
Kraken Agrees to $30 million Settlement with SEC and Stops U.S. Customer Staking Program
Kraken (Payward Inc.) in Advanced Stages of SEC Unregistered Securities Probe
The exchange continues to advocate for practical and effective rules for digital assets and stresses the importance of comprehensive Congressional action to avoid the U.S. falling behind in the global crypto and Web3 advancements.
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, artificial intelligence, 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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R/Note: Tokenized VC Dividends on Avalanche
Security Token | Nov 20, 2023
Image: Republic R/Note Whitepaper
Republic Crypto is set to launch a revenue-sharing tokenized security, R/Note, on the Avalanche blockchain
R/Note stands out as a security token (read Whitepaper), distinct from the myriad of non-security crypto tokens. Its primary function is to distribute stablecoin dividends to investors from Republic's venture portfolio. This approach is a part of the growing trend of tokenizing real-world assets (RWAs), such as bonds or private funds, onto blockchain platforms.
See: Societe Generale: Lists First Security Tokens Utilizing Blockchain on Luxembourg Stock Exchange
The choice for hosting R/Note on Avalanche network is strategic. Its capabilities, particularly in setting up controllable subnets, make it ideal for managing digital securities. These subnets can be tailored to comply with the regulatory requirements associated with digital securities.
R/Note will enable Republic to distribute up to 25% of its dividend pool to token holders. This distribution will occur whenever Republic exits a successful investment, ensuring investors receive their pro-rata share.
Republic's approach to tokenized securities is designed to be more accessible and viable than previous models. The company's integrated structure for issuing and trading these assets in-house is a key differentiator, offering a streamlined and efficient process for investors.
With $30 million already raised in a public sale, R/Note is poised to make a significant impact once it goes live on the Avalanche blockchain. Plans for a secondary market are also in the pipeline, further enhancing its appeal.
Challenges of Security Tokens
Security tokens, which represent digital ownership in a real-world asset and are subject to regulatory oversight, have faced several challenges in the past, such as:
- One of the most significant hurdles for security tokens has been navigating the complex and often unclear regulatory landscape. Different jurisdictions have varying regulations regarding security tokens making it difficult for issuers and investors to understand their legal standing, thus hindering market growth
- The market for these tokens is relatively small compared to traditional securities or more established cryptocurrencies. This lack of liquidity can lead to wider bid-ask spreads and difficulty in buying or selling large quantities without affecting the market price.
- There has been a general lack of awareness and understanding of what security tokens are and the benefits they offer - think perception and trust.
- The technology and infrastructure required to issue, manage, and trade security tokens are still developing - think security and user-friendliness.
- Integrating blockchain-based assets like security tokens with traditional financial systems and regulations including issues like custody, compliance, and reporting requirements.
Conclusion
By bridging the gap between traditional venture capital and the digital asset space, R/Note offers a unique opportunity for investors looking to diversify their portfolios into crypto and blockchain.
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, artificial intelligence, 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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WonderFi Buys Bitvo Further Consolidating Crypto Markets
Crypto M&A | Nov 17, 2023
Bitvo logo
WonderFi Technologies Inc., through its subsidiary Bitbuy Technologies Inc., acquires all client accounts of Bitvo Inc., and the Bitvo.com domain
Bitbuy has successfully purchased over 17,000 registered client accounts from Bitvo, a Calgary-based crypto-trading platform. These accounts have collectively generated over $235 million in trading volume and over $1.5 million in net revenue in the past twelve months. In October 2023 alone, Bitvo reported over $35 million in trading volume and approximately $375,000 in net revenues.
See: Kevin O’Leary-backed WonderFi acquires Coinberry for $38.5 million
The acquisition was executed through an asset purchase agreement. Bitbuy made an upfront pre-payment to Bitvo and will pay a total of 50% of a net-revenue share from the acquired client accounts, subject to certain conditions and up to specified net revenue maximums.
Bitbuy will integrate Bitvo's client accounts into its platform, ensuring a seamless transition for Bitvo's clients. This integration is expected to incur nominal incremental operating costs for WonderFi.
The acquisition received non-objection letters from relevant securities regulators, ensuring compliance with Canadian financial regulations.
Market Dominance and Strategic Growth
With this acquisition, WonderFi has consolidated its position in the Canadian market, now controlling client accounts, trading volumes, and associated net revenues from five of the eleven registered crypto-trading platforms in Canada.
See: Kevin O’Leary-Backed DeFi Platform WonderFi to Purchase Bitbuy for CA$206M in Cash, Shares
The acquisition represents a non-dilutive acquisition for WonderFi, promising immediate cash flow, increased scale, and a diverse client profile, including a strong institutional client base from Bitvo.
Dean Skurka, President and CEO of WonderFi:
Emphasized the strategic importance of the acquisition, highlighting its non-dilutive nature, immediate cash flow benefits, and the expected payback period of less than six months. He also noted the acquisition's role in accelerating WonderFi's growth and diversifying its client profile.
Closing Thought
See: WonderFi’s Much Anticipated Crypto Merger with Coinsquare and Coinsmart Officially Closes
This move comes at a time when the Canadian crypto landscape is witnessing significant changes, with international players like Coinbase entering the market and others like Binance and Bybit exiting.
View the original release --> here
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, artificial intelligence, 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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JPMorgan’s New Programmable Payments in Blockchain
Blockchain Payments | Nov 17, 2023
Image: Pexels/Digital Buggu
JPMorgan Chase introduces programmable payments to JPM Coin digital payment infrastructure, its blockchain-based settlement token
- JPM Coin launched in 2019 and was designed to facilitate wholesale payments for institutional clients on a blockchain platform. As of last month, it reached a milestone of handling $1 billion in transactions daily. While this figure is still modest compared to the $10 trillion moved daily by the bank in total, it signifies the growing importance of blockchain technology in mainstream financial operations.
See: Goldman Sachs Funds Blockchain Payments Firm
- Programmable payments: Users of JPM Coin can now set up their accounts to execute payments automatically based on predefined conditions. Previously, JPM Coin users had to establish standing orders for payments at set times.
- This capability allows for a more dynamic and responsive payment system, especially crucial in a financial environment that increasingly operates around the clock. For example, payments can be programmed to cover overdue payments or margin calls when specific conditions are met, offering a more efficient way to manage financial obligations.
Growing Influence of Blockchain in Banking
- The expansion of JPM Coin's transaction volume reflects a significant shift towards digital tokens in financial transactions, offering faster, more secure, and efficient payment solutions.
See: JPMorgan Announces First Transaction on TCN Network
- Further the introduction of programmable payments is expected to pave the way for more advanced applications of blockchain technology in various financial services, potentially leading to broader adoption and innovation in the sector.
One Inc and JP Morgan Partner on Insurance Claims Payments
- One Inc, a digital payments network for the insurance sector, has partnered with J.P. Morgan Payments. This collaboration enables insurance carriers to utilize J.P. Morgan’s liquidity and payments capabilities as part of One Inc’s digital claim payouts platform, enhancing the digitization and depth of the claims experience.
- Jason Tiede, Global Head of Corporate Development & Partnerships, J.P. Morgan Payments" "The insurance vertical has very complex and unique requirements to drive further digitization in the industry, and as such, we are excited to partner with a leading vertical fintech solution like One Inc to unlock new capabilities for joint P&C insurance clients.”
Real Use Cases Emerging
The introduction of programmable payments is a game-changer that allows JPM Coin users to automate their transactions based on specific conditions, moving beyond the limitations of standing orders. This flexibility is crucial in today's fast-paced financial environment, where responsiveness and adaptability are key to managing complex financial obligations efficiently.
See: LQWD’s AI Tech Achieves 4500% Lightning Network Surge
The advancements in blockchain payments, led by JPMorgan's latest initiatives, are not just about technological innovation. They represent a more dynamic, secure, and efficient financial ecosystem.
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, artificial intelligence, 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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Goldman Sachs Funds Blockchain Payments Firm
Funding | Nov 17, 2023
Image: Unsplash/Shubham Dhage
Fnality raises £77.7M led by Goldman Sachs for a blockchain payment network, set to transform global financial transactions
Fnality, a blockchain-based wholesale payments firm, has successfully raised £77.7 million ($95.09 million) in its second round of funding. This round was led by Goldman Sachs alongside other prominent financial firms like BNP Paribas, DTCC, Euroclear, Nomura, and WisdomTree participated in this funding round.
With the latest funding, Fnality's total capital raised to date is £132.7 million.
The funds are earmarked for establishing a round-the-clock global liquidity management network, catering to new digital payment models in wholesale financial markets and emerging tokenized asset markets.
See: Understanding the Impact of Blockchain on Banking: Cross-Border Payments
Fnality's Evolution
Fnality International began as a research project focused on understanding how Distributed Ledger Technology (DLT) could transform financial markets. It evolved into a consortium of financial institutions exploring the use of Blockchain and DLT for tokenizing cash assets to settle securities trades, addressing challenges in Financial Market Infrastructures (FMI).
Key Developments:
- Utility Settlement Coin (USC) Project: The initiative was initially known as the USC Project, with a core objective to create a peer-to-peer digital cash asset for settling tokenized transactions with finality.
- Payment Solution Goals: The envisioned payment solution aimed to be available in multiple currencies, capable of interoperating across various business platforms, and represent a digital version of money held in central bank accounts.
After establishing the feasibility of their aims, the consortium members invested in creating Fnality International (Fnality) to enable 'on-chain' payment.
See: Bank Consortium to Launch “Paze” to Challenge Big Tech’s Fintech Dominance
Fnality now includes 17 major institutions as shareholders, such as Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, Credit Suisse, Euroclear, ING, KBC Group, Lloyds Banking Group, Mizuho Financial Group, MUFG Bank, Nasdaq, Nomura, Sumitomo Mitsui Banking Corporation, State Street Corporation, and UBS.
Next Steps
Fnality is awaiting approval from the Bank of England to commence operations, with plans to launch the Sterling Fnality Payment System in 2023. This system promises to be a game-changer, offering round-the-clock global liquidity management and supporting new digital payment models in both wholesale financial markets and emerging tokenized asset markets.
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, artificial intelligence, 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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PayPal’s Blockchain Vision As New Financial Rail
Blockchain and Payments | Nov 16, 2023
Image: Pixabay/raphaelsilva
PayPal Declares Blockchain the "New financial rail" as Regulators Scrutinize its Stablecoin PYUSD
Strategic Shift in Global Payments
- PayPal, a titan in the digital payment sector, recently endorsed blockchain technology as the new cornerstone of financial transactions. This is a strategic shift in global payments and part of PayPal's broader fintech strategy, as emphasized in their "Pay How You Want" initiative.
- With blockchain, PayPal aims to revolutionize how payments are processed, offering near-instant settlement times that stand in stark contrast to traditional financial systems.
- Stablecoin: PayPal recently introduced its own US dollar stablecoin, PayPal USD (PYUSD) which is designed to offer a more efficient transaction method, addresses the growing demand for faster and more cost-effective global payment solutions. PYUSD, pegged to the dollar and backed by solid assets like US dollar deposits and short-term Treasuries, has achieved a market capitalization of approximately $158 million reflecting a growing acceptance and trust in digital currencies.
See: PayPal Launches MetaMask Web3 Wallet Integration to Enable Ethereum Transactions
- Layer-2, NFTs, metaverse: beyond stablecoin innovation, PayPal's patent filings reveal plans to explore layer-2 networks and non-fungible tokens (NFTs) signalling interest to integrate blockchain technology across a range of digital transactions. The company's research and development efforts are focusing on blockchain validation, payments between network layers, and digital asset recommendation in the metaverse.
- With over 400 million active accounts, PayPal is uniquely positioned to bridge the gap between emerging blockchain technologies and widespread adoption, continuing its legacy as a pioneer in the payments industry.
PayPal's Compliance Challenges
As PayPal ventures into the realm of blockchain and stablecoins, it faces intense scrutiny from regulatory bodies like the SEC and the CFPB.
- SEC Subpoenas PayPal Over PYUSD Initiative (SEC filing): "On November 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request." The SEC's action reflects concerns about the stability and regulatory compliance of stablecoins. SEC Chair Gary Gensler's suggestion that stablecoins might be classified as securities, subjecting them to more stringent investor-protection and disclosure rules.
See: PayPal and Venmo are Adopting Apple Pay and More
- CFPB Investigation investigating PayPal's Venmo service. PayPal also received a civil investigative demand from the CFPB in October, focusing on Regulation E, which governs electronic fund transfers. This investigation includes an examination of how PayPal's service Venmo manages transactions and resolves errors under this regulation. The CFPB's probe is particularly concerned with how PayPal and Venmo handle fraud issues, especially in scenarios where customers are misled into sending money to fraudsters.
Future Outlook
In the next two years, we anticipate PayPal to continue to progressively innovate in a couple of areas:
- Artificial Intelligence and Machine Learning
- PayPal is expected to heavily invest in AI and ML, revolutionizing personalized financial services and fraud detection. This could include AI-driven financial advising, automated customer service enhancements, and sophisticated algorithms for real-time fraud prevention, setting new standards in the fintech industry.
See: Autonomous IoT Transactions and Micropayments
- Internet of Things (IoT) Payments
- The integration of payment solutions with IoT devices. Imagine your smart car paying for its own parking or your refrigerator ordering and paying for groceries. PayPal's potential foray into IoT payments could redefine the concept of 'seamless transactions', making PayPal an integral part of the increasingly connected world.
PayPal is reshaping the global payment landscape, marked by the launch of its stablecoin PYUSD and ventures into advanced blockchain initiatives and future applications. However, these innovations have been met head on with regulatory challenges from the SEC and CFPB. What an exciting time to be a global payments pioneer.
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, artificial intelligence, 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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MAS Update: Asset Tokenization in Project Guardian
Regulatory Innovation | Nov 16, 2023
Image by macrovector on Freepik
Singapore's MAS Advances Asset Tokenization Initiatives Under Project Guardian.
Key Developments
- MAS is collaborating with 17 financial institutions to launch five new industry pilots. These pilots are exploring a range of tokenization use cases, potentially revolutionizing the capital markets value chain, including listing, distribution, trading, settlement, and asset servicing.
See: Singapore Announces Project Guardian to the Value Created in Leveraging Asset Tokenization
- Innovative Pilots and Partnerships:
- Citi, T. Rowe Price Associates, Inc., and Fidelity International are working on institutional-grade mechanisms for efficient digital asset trades.
- BNY Mellon and OCBC are trialing a cross-border FX payment solution.
- Ant International is developing a treasury management solution for real-time multi-currency clearing and settlement.
- Franklin Templeton is exploring tokenized money market funds through a Variable Capital Company (VCC) structure.
- J.P. Morgan and Apollo are focusing on digital assets for investment and management of discretionary portfolios.
- New Funds Workstream: Responding to the funds industry's interest, MAS is launching a workstream focused on the native issuance of VCC funds on digital asset networks. This initiative will address various considerations, including tax, policy, and legal aspects, and aims to broaden distribution channels for asset managers.
Scaling Tokenized Markets
- Global Layer One (GL1) Initiative: MAS is working with international policymakers and financial institutions to design an open, digital infrastructure for hosting tokenized financial assets and applications. GL1 aims to facilitate cross-border transactions and ensure compliance with regulatory standards.
- Interlinked Network Model (INM): This model will provide a framework for exchanging digital assets across independent networks, allowing financial institutions to transact without being on the same network. A whitepaper detailing INM's application and design considerations has been published.
See: Bank of Canada Publishes Analytical Notes on DeFi
- International Collaboration: The inclusion of the International Monetary Fund (IMF) in Project Guardian's policymaker group adds an international perspective to the project, focusing on policies and legal issues for cross-border platforms.
View the original release --> here
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, artificial intelligence, 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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