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
IMF Pressuring El Salvador to Limit BTC Exposure
Bitcoin | Oct 7, 2024
Image: Freepik/pvproductions
During Funding Negotiations, the International Monetary Fund (IMF) Urges El Salvador to Limit Bitcoin Exposure
In 2021, El Salvador become the first government to declare Bitcoin as a legal currency much to the chagrin of IMF. Now during fresh funding/debt related discussions, the IMF is urging El Salvador to restrict the usage of crypto and enhance its regulatory framework to limit exposure to Bitcoin.
See: IMF 9 Point Action Plan for Crypto Asset Treatment: Recommends Against Legal Tender Status
The IMF has been critical of El Salvador's Bitcoin adoption since the start, highlighting risks to financial stability, economic growth, and transparency. Previously, the IMF called for the full dissolution of the country's bitcoin law to mitigate risks but the IMFs latest transcript press briefing is now urging El Salvador to narrow the law's scope to reduce public exposure to crypto.
Julie Kozack, IMF Director of Communications:
"With respect to the details on bitcoin what we have recommended is a narrowing of the scope of the bitcoin law, strengthening the regulatory framework and oversight of the bitcoin ecosystem, and limiting the public sector exposure to bitcoin."
El Salvador and Bitcoin
As part of its bold efforts to incorporate Bitcoin into its banking system, in November 2022 El Salvador's President Nayib Bukele announced that it would commit to purchasing 1 BTC daily until it becomes unaffordable with fiat currencies. As of October 7, 2024, according to it's bitcoin office website, El Salvador owns over $376 million in Bitcoin, and according to Cointelegraph, the country was approx $31 million in profit after 3 years of implementing it's crypto banking strategy.
See: El Salvador Update: ‘Volcano Bonds’, Bitcoin City, Crypto Visa Program
Further, as per Forbes, President Bukele indicated that it would not include fresh debt issuance in its 2025 national budget, hinting that the country is preparing for the prospect of not receiving IMF funding despite the IMF investigating the country's crypto products like its Volcano Bonds.
Having said that, there are ongoing talks between El Salvador and the IMF to help boost productivity, improve governance, and stabilize the economy.
Domestic Perspectives
Crypto advocates in El Salvador feel that the Bitcoin regulation has changed the country's reputation abroad. According to John Dennehy, creator of the educational non-governmental organization Mi Primer Bitcoin, Bitcoin has changed how people throughout the world view El Salvador, dispelling previous myths about its instability and violence. And according to Lina Seiche, the inventor of "Little Hodler" the country has benefited from more investment and tourism since legalizing bitcoin assets.
See: Tax-Free Bitcoin Zone Proposed by the USABTC
Conclusion
If El Salvador can strike a compromise with the IMF in following some of the IMFs recommended regulations while also keeping its Bitcoin policies in place, it may be a pathway forward while establishing a precedent on the integration of cryptocurrencies with established financial institutions around the world.
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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SEC Appeals Ripple Ruling; Veri Token Holders File Complaint
Ripple | Oct 7, 2024
SEC Files Notice of Appeal in XRP Case As VeriDAO Token Holders File Complaint Against Acting Crypto Chief
On October 2, 2024, the SEC filed a notice of appeal after judge 2023 ruling by Judge Analisa Torres that Ripple's XRP tokens were considered securities when sold to retail investors. Adding to the complexity of the discussion in focus, Veri token holders who were also a party in the SEC vs Ripple case have filed a complaint against the SEC (Acting) Chief of the Crypto Asset and Cyber Unit for regulatory overreach and questionable enforcement practices that stifled innovation in the U.S. digital asset market.
Background
In December 2020, the SEC sued Ripple Labs CEO Brad Garlinghouse and co-founder Chris Larsen claiming that XRP was sold as an unregistered security. After significant a prolonged back and forth case, in 2023 Judge Analisa Torres ruled a mixed outcome saying that XRP was not deemed a security when sold to retail investors (win for crypto industry), yet institutional sales made by the founders of Ripple were in fact an unregistered securities offering.
See: SEC Enforcement Chief Grewal Leaves to Join Milbank LLP
The recent filing by the SEC on October 2 is an appeal to the courts in attempt to reverse some of the verdict. While the appeal was predicted by industry, it clouds the potential of a recent application by Bitwise to register an XRP exchange-traded fund (ETF) out of Delaware.
Bar Complaint Against Jorge G. Tenreiro
Crypto advocates have now focused their attention on Jorge G. Tenreiro who played an important role in several enforcement cases including XRP, VERI, and TON projects. Veri token holders have filed a complaint against Tenreiro who is currently the (Acting) Chief of the SEC's Crypto Asset and Cyber Unit, highlighting misconduct and overreach (i.e., misleading evidence and aggressive tactics) while linking similarities between his acts in the VERI case and the Ripple case.
The crypto community is hoping to have their complaint validated, which would lead to disciplinary action against Tenreiro and a re-examination of previous SEC actions under his oversight.
See: Inside Federal Securities Laws and Crypto’s Tightrope
Such a result may have significant implications for crypto and how the SEC handles future cases. You can learn more about the New York bar complaint against Jorge Tenreiro for professional misconduct here.
Outlook
The outcome of the SECs Ripple appeal and bar complaint against the SEC's Jorge G. Tenreiro is of major significance to retail investors, token holders and the entire crypto industry, as the dispute will likely influence crypto in the U.S. and around the globe.
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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SEC Enforcement Chief Grewal Leaves to Join Milbank LLP
SEC | Oct 7, 2024
Image by Freepik
Gurbir Grewal departs the SEC to work for Milbank LLP After Aggressive Enforcement Tenure
In an Oct 2 press release, the SEC announced that Gurbir S. Grewal, the Director of Enforcement will leave on October 11, 2024 to become a partner in the litigation and arbitration of Milbank LLP. During his three year tenure at the SEC, Grewal oversaw more than 2,400 enforcement proceedings and obtained more than $20 billion in fines and disgorgements. Sanjay Wadhwa, the current Deputy Director, will take over as Acting Director.
- As the crypto sector can easily attest to, during Grewal time at the SEC he oversaw cryptocurrency enforcement with over 100 actions targeting major platforms for securities violations, such as the sale of Ripple's XRP token, Coinbase's staking services, and Kraken's staking program too.
- Grewal boosted penalties to serve as deterrants, and more than $1 billion was awarded to whistleblowers during his time.
- He also emphasized recordkeeping compliance and transparency, which lead to over $2 billion in fines to regulated entities.
- Prior to Grewal's post at the SEC he served as New Jersey’s Attorney General focusing on securities fraud and economic crimes.
See: SEC Enforcement Director Grewal On Crypto Regulation
Gurbir S. Grewal:
“While we have faced and overcome many challenges over the last three plus years, there has been one constant throughout: the public servants of the Enforcement Division stand ready to do everything they can to protect investors and market integrity. Their expertise, professionalism, and dedication are, indeed, unparalleled, and it has been the privilege of a lifetime to have been able to call them colleagues. From recalibrating penalties and remedies to confronting emerging risks to holding issuers, insiders, and gatekeepers accountable, I am incredibly proud of all that we’ve accomplished as a Division during my tenure. I am grateful to Chair Gensler not just for the opportunity to lead the Division, but also for his unwavering commitment to investor protection and support of a robust enforcement program.”
Conclusion
Grewal's exit could signal a shift in SEC's enforcement after having set the standard for strong protection and aggressive regulatory compliance. He brings a wealth of securities enforcement experience to his new role as partner at Milbank LLP.
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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Binance Hits $100 Trillion as CZ Set for Early Release
Crypto | Sep 27, 2024
Image from Binance website
Binance Founder, Changpeng Zhao, Set for Early Prison Release Today
Changpeng Zhao (CZ) is anticipated to be released from prison today two days ahead of schedule because his original release date of Sept 29, 2024 falls on a weekend. Even while he will not be able to take on a leadership position at Binance for at least three years, his $60 billion fortune is still dependent on the platform's success because he is its biggest shareholder. CZ completed a four-month term including 2 months in a light security jail before being sent to a halfway home. What will CZ do next? While in prison he launched an Educational Platform Giggle Academy
Binance New CEO Announces $100 Trillion Total Trading Volume
When CZ was sent to prison, Richard Teng took over Binance as the new CEO, a former financial regulator who was overseeing compliance and regulatory partnerships. He has made it his mission to keep Binance focused on innovation and development while guiding it toward stricter regulatory compliance since taking the helm. This week, Teng announced that Binance exchange had surpassed a $100 trillion in total trading volume since launching in 2017 and under his leadership the company has now surpassed 230 million users via global expansion to jurisdictions like Indonesia, India, Kazakhstan, Thailand, and Dubai.
IPO on the Horizon?
In a recent interview with Coindesk, Teng made it clear that Binance does not have plans for an Initial Public Offering. Due to it's huge trading volume and rapid user growth, the company is profitably stable as it moves from a founder-led to a board-led sustainable enterprise.
Teng admits the complexities of managing a global crypto exchange with different laws in different countries. With 19 licenses worldwide including recent approvals in emerging regions.
Conclusion
Whether CZ moves into philanthropy, invests, or launches other new ventures, he will be influential in shaping the future of Binance's future path and the overall crypto landscape.
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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CSA Extends Deadline for Crypto Platforms’ VRCA Compliance
Crypto Regulation | Sep 26, 2024
CSA Extends Compliance Deadline for Crypto Platforms Trading VRCAs
The Canadian Securities Administrators (CSA) has published an update for crypto asset trading platforms (CTPs) and those with pre-registration undertakings (PRUs) on complying with requirements for value-referenced crypto assets (VRCAs), such as stablecoins. While Canada doesn't have specific stablecoin regulations, the CSA is enforcing existing securities laws to protect investors. The compliance deadline for platforms has been extended to December 31, 2024, giving CTPs more time to meet the requirements or offer alternatives that address investor protection concerns.
Compliance Deadline Extended
CTPs were originally given until April 30, 2024 to stop trading non-compliant stablecoins. But because of compliance difficulties the platforms were having, the deadline was initially extended to October 31, 2024, and then again to December 31, 2024. This extension gives CTPs additional time to comply with CSA regulations or offer substitute solutions to investor protection issues.
While stablecoins (a form of VRCA) are widely traded in Canada, the CSA emphasizes that there is not currently a specific stablecoin regulatory framework. Instead, the CSA is relying on existing securities regulations to ensure any VRCAs provided by CTPs meets the appropriate requirements of investor protection, financial transparency, and disclosure.
See: Regulatory Updates for Crypto Asset Trading Platforms
By December 31, 2024, all CTPs registered or with PRUs must ensure that any VRCAs issued to customers comply with their registration terms or PRUs. Platforms that were previously obligated to stop enabling customers to buy or hold non-compliant VRCAs (except for specific fiat-backed assets) by December 29, 2023, and the deadline extension does not change that.
Open to Exemptions for Specific Use Cases
The CSA is open to exemptions for particular VRCA use cases that do not raise investor protection concerns. CTP and VRCA issuers are urged to contact regulators about viable alternatives or unusual use cases to discuss.
Conclusion
The CSA's extended deadline allows CTPs more time to comply with VRCA-specific securities requirements.
See: CSA’s 2024 Investor Index. What Fintechs Need to Know
Establishing clear standards for the treatment of VRCAs would promote transparency and security for investors who trade in these assets.
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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Prager Metis Pays $1.95 Million for FTX Auditing Failures
Governance | Sep 25, 2024
Image: Freepik
Prager Metis Settle $1.95M SEC Fine Over FTX Audits
The collapse of FTX in November 2022 exposed major supervisory and governance gaps in what is now known as the biggest crypto fraud in history. An important participant in this fiasco was the auditing company Prager Metis CPAs who agreed to pay a $1.95 million fine to resolve allegations of audit failures in FTX and breach of auditor independence regulations that the Securities and Exchange Commission (SEC) had issue with.
Audit Failures and Negligence
From February 2021 to April 2022, Prager Metis was responsible for auditing FTX according to the Generally Accepted Auditing Standards (GAAS) but the SEC took enforcement action and a court judge raised the following issues:
- Prager Metis did not adequately assess the risk between FTX and Alameda Research which was controlled by FTX's CEO Sam Bankman Fried and led to the misappropriation of billions in customer funds.
- Prager Metis put together an audit team without the skills or experience required to audit a fast changing crypto company like FTX. As a result, the Prager Metis failed to recognize significant warning signs, such as FTX's substantial holdings in illiquid tokens and its close relationship and financial links to Alameda.
See: Which Companies Were Affected by FTX’s Collapse?
- Prager Metis's audit reports misled investors into believing that FTX's financial statements were accurate and followed Generally Accepted Accounting Principles creating a false sense of security.
- The judge emphasized that Prager Metis's inclusion of indemnity clauses in their engagement letters was a violation of auditor independence regulations. This hurt their ability to stay unbiased when reviewing over 200 companies from 2017 to 2020, including FTX. As a result, the reliability of their audits was questioned.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement:
"Prager Metis fell short in all of these areas. Because Prager’s audits of FTX were conducted without due care, for example, FTX investors lacked crucial protections."
SEC Settlement
- A $745 000 civil fine for fraud based on carelessness. This fine was imposed in response to the company's violations of auditing practices when working with FTX.
- $1.205 million penalty for violating auditor independence requirements involving incorrect indemnity arrangements in over 200 audit engagements between 2017 and 2020.
- Remedial action to hire an independent compliance expert who will review and improve its audit and quality control processes. Additionally, restrictions on Prager Metis's ability to take on new audit customers was restricted.
See: The Complexities of Auditing Digital Assets
Jorge G. Tenreiro, Acting Chief of the SEC's Crypto Assets and Cyber Unit:
“Cutting corners on obligations to comply with the law… does not pay for the entities who take them or for the multitude of victims that this misconduct leaves in its wake”.
Conclusion
The penalties against Prager Metis raise important questions about whether auditors are prepared to handle quickly evolving and risky industries like cryptocurrency. Auditors must stay independent, skilled, and skeptical to protect investors. In the case of FTX, failing to meet these standards led to major financial losses and damaged public trust in both the auditing profession and the 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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Caroline Ellison Sentenced 2 Years for Role in FTX Fraud
FTX Saga | Sep 25, 2024
Image: Freepik/rawpixel.com
Ex-Alameda CEO Caroline Ellison Gets 2 Years for Covering Up One of Crypto's Biggest Frauds, FTX
Yesterday, a key figure in Sam Bankman-Fried's (SBF) cryptocurrency business and the former CEO of Alameda Research, Caroline Ellison received a two-year jail term for her involvement in the FTX scam, which caused consumer and investor losses of billions of dollars. Compared to SBF who received 25 years in prison, Ellison received a lighter sentence as a result of her cooperation with the police during the trial but the crypto sector will always be affected by her role in this well publicized drama.
Caroline Ellison:
"I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us. The human brain is truly bad at understanding big numbers. Not a day goes by [that I don't] think about all of the people I hurt.”
See: Key Moments Inside the SBF Trial: Days 1-12
Ellison played a unique role in what is now seen as one of the biggest bitcoin scams ever. More than $8 billion in consumer cash was lost in FTX's collapse as a result of Alameda Research's speculative and unlawful trading activities that used FTX's customer deposits under Ellison's direction. Ellison was facing a maximum term of 110 years of jail time but her sentence was lowered to only 2 years by cooperating with federal officials. She is also required to forfeit around $11 billion of her assets to the courts.
Bloomberg reported live on the sentencing. Signalling that the severity of the fraudulent activities warranted consequences, Judge Kaplan said:
A “literal get-out-of-jail-free card I can’t agree to.”
“I’ve seen a lot of cooperators in 30 years. I’ve never seen one quite like Ms. Ellison."
Conclusion
After months have gone by since SBFs 25 year sentencing, the FTX drama has resurfaced with Caroline Ellison's 2 year sentencing, raising more general concerns about accountability, governance, and legal safeguards in the crypto space.
See: SEC Enforcement Director Grewal On Crypto Regulation
When the dust settles, the case will probably force regulators in the U.S. and around the world to adopt stronger standards designed to stop fraud of this kind in the future to protect investors. Ellison will remain free on bail until November 7.
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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