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
FTX Clients To Be Fully Reimbursed with Interest
FTX | May 8, 2024
Image: Unsplash/Mariia Shalabaieva
FTX Bankruptcy Recovery Plans
When FTX, one of the largest crypto exchanges collapsed in 2022, the fintech world cringed, and anticipated the worst outcome for creditors and customers, however, recent developments suggest a much more promising outcome. FTX's legal team has announced a robust plan to repay creditors and customers following its bankruptcy.
- Up to $16.3 billion has been recovered from asset sales and litigation claims, which will fully compensate the impacted parties. Small claimants (those claiming $50,000 or less) are expected to receive 118% of their investment within 60 days of the plan’s approval, indicating a swift and favorable resolution for most affected users.
- Despite the overall market volatility, FTX’s resolution plan does not allow creditors to benefit from the recent surge in cryptocurrency values. This has raised questions about asset valuation methods during bankruptcy resolutions in the crypto sector.
See: Audio Interviews (post-bankruptcy) with Sam Bankman-Fried on FTX Collapse
- The handling of FTX’s bankruptcy has been closely monitored by regulatory bodies worldwide. The structured repayment approach may set a precedent for future crypto exchange failures, emphasizing the importance of regulatory oversight and proactive financial planning. This case highlights the critical need for enhanced risk management and transparent operational practices among cryptocurrency exchanges.
Outlook
The resolution of FTX’s bankruptcy is likely to restore some investor confidence in the volatile cryptocurrency market. Back in Q3 of 2023, Gary Gensler suggested that there was a way FTX could be resurrected under stringent legal compliance. Is that day approaching?
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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CRA Pursues $54 million in Unpaid Crypto Taxes
Crypto | May 7, 2024
Image: Freepik/rawpixel.com
CRA's Enforcement on Unpaid Crypto Taxes in Canada
The Canada Revenue Agency (CRA) has initiated about 400 audits and examinations targeting crypto asset non-compliance as it pursues approximately $54 million in unpaid taxes from cryptocurrency transactions. This reflects an increased enforcement environment as regulators catch up with technological advancements in finance.
See: CRA Tax Implications for Individuals and Crypto Platforms
One of the issues is the lack of public awareness regarding crypto tax obligations. A recent survey commissioned by the CRA found that a third of respondents were unclear about their tax duties, with scores on regulatory knowledge averaging just over 50%.
Fintech companies must not only comply with a complex regulatory environment but they must be prepared to meet the CRA’s use of an Unnamed Persons Requirement (UPR) to collect transaction data from its customers. In 2021, Coinsquare was required to provide information about any clients that either transacted or held at least $20,000 to the CRA and also anyone with total transactions and earnings from 2014 to 2020 of 16,500 of the most active users. Crypto companies must maintain robust compliance programs.
Did you receive a letter?
Sahil Behal, a director general of CRA’s compliance branch explained that the letters issued to targeted taxpayers provide a 45-day window to report any undisclosed income from cryptocurrencies. If the taxpayers comply within this period, the CRA will forgive any associated penalties and interest. Failure to respond, however, could trigger a comprehensive audit by the agency.
See:
Tax Tips for Canadian Crypto Users in 2024
The CRA is Going After Day Traders Who Use Their TFSAs
Outlook
The Canadian government plans to introduce the Crypto-Asset Reporting Framework by 2027, which will mandate crypto exchanges and service providers to report detailed annual transaction data. This impending regulation will significantly impact how crypto businesses operate and report.
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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Revolut Launches Low Fee Crypto Exchange in the UK
Crypto | May 7, 2024
Image: Revolut X
Revolut Launches Revolut X, a New Crypto Trading Platform in the UK
Revolut, a leading fintech company, has announced Revolut X, a dedicated crypto trading platform for U.K. retail customers. This strategic move aims to provide traders with a cost-effective and user-friendly platform for cryptocurrency transactions. Revolut X is differentiating itself by offering low fixed fees and easy fiat-to-crypto conversions, looking to appeal to both seasoned and new crypto traders.
- Revolut X offers a highly competitive fee structure, charging 0% for makers and a mere 0.09% for takers. This fee model undercuts many of the existing major players in the cryptocurrency exchange market, potentially attracting a large volume of active crypto traders.
- The platform supports seamless integration with existing Revolut accounts, allowing users to switch between crypto trading and other financial services without additional fees. This integration enhances user experience by simplifying the process of managing finances and crypto assets in one place.
See: Revolut Launches New International Mobile Wallet Service
- In response to stringent regulatory expectations, Revolut X ensures that all user assets are held 1:1 and predominantly in cold storage. This approach enhances the security of the digital assets and also aligns with the financial regulatory frameworks, emphasizing a compliance-first strategy.
- Initially, Revolut X will support trading in over 100 cryptocurrencies, including major ones like Bitcoin, Ethereum, and Ripple. Plans for expanding the range of tradable cryptocurrencies are set for the coming months, broadening the appeal to a wider audience of crypto enthusiasts.
Strategic Expansion
Revolut's venture into the cryptocurrency market represents a significant aspect of its broader strategy to innovate and diversify its fintech offerings. The company has progressively expanded its cryptocurrency initiatives over the years, showcasing a strong commitment to integrating digital currency solutions into its core services.
See: UK’s Future Crypto and Stablecoin Regulation
Revolut introduced Revolut Ramp in March 2024. This service enables users to purchase cryptocurrencies directly within their Web3 wallets, such as through a partnership with Consensys, the developer of MetaMask. Revolut Ramp represents a bridge between conventional banking services and decentralized financial (DeFi) applications, making cryptocurrency transactions more accessible and seamless for users.
Closing
The launch of Revolut X is an expansion of services coincides with a bullish phase in the crypto market, coupled with clearer regulatory landscapes. This timing could maximize the platform's adoption and effectiveness, tapping into the growing demand for reliable and efficient crypto trading solutions.
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 Issues Wells Notice to Robinhood Over Crypto
Crypto Enforcement | May 6, 2024
Image: Robinhood markets inc
Robinhood receives Wells Notice from SEC over crypto operations. Vows to fight for regulatory clarity.
On May 6, 2024, Robinhood Markets announced that it received a Wells Notice from the SEC, signaling potential enforcement action regarding its cryptocurrency offerings. This notice follows an extended period of regulatory scrutiny over how cryptocurrencies are classified and handled by financial platforms.
See: 2024 Budget: Crypto ETFs & Registered Accounts Consultation
Robinhood, known for democratizing stock market trading, has expanded aggressively into cryptocurrencies, a move that has now attracted heightened regulatory attention.
Dan Gallagher, Chief Legal, Compliance and Corporate Affairs Officer, Robinhood Markets, Inc.
“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business. We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
"To our customers, this development will not affect your account or the services we provide. Robinhood Crypto is here to stay and we’ll keep innovating, shipping products, and fighting for regulatory clarity for the good of the industry and our customers."
This story is developing...
Outlook
In addition to Robinhood, Coinbase and Uniswap are among the major entities that have been targeted with Wells Notices from the U.S. Securities and Exchange Commission (SEC) just recently. Coinbase, a prominent cryptocurrency exchange, received a Wells Notice earlier this year, signaling the SEC's intention to potentially pursue enforcement action. Similarly, Uniswap, known for its decentralized exchange services, also received a notice, marking an increase in regulatory scrutiny within the crypto sector
See: Consensys Sues the SEC Over Ethereum’s Status
All of these active investigations may set significant precedents for how digital assets are classified and regulated, influencing the operational and strategic decisions of fintech firms. This is a critical watch point for investors and founders within the sector, as it could dictate the pace and direction of innovation and market participation in the coming years.
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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Changpeng Zhao Sentenced to 4 Months Prison
CZ | May 1, 2024
Image: Freepik
The Sentencing of Changpeng Zhao (CZ): A Turning Point for Crypto Regulation?
Despite federal prosecutors wanting CZ behind bars for 3 years, the iconic founder of Binance, Changpeng Zhao (CZ), has been sentenced to four months in prison for violating anti-money laundering laws in the U.S. bringing another crypto saga to pass, and signalling a potential turning point for the regulation of the cryptocurrency market.
See: Canadian Investors Lead Class Action Against Binance Canada
Zhao's sentencing is part of a broader crackdown on cryptocurrency exchanges globally. In recent years, regulators have been clear that they will not hesitate to enforce laws strictly to ensure consumer protection and financial stability, otherwise known as 'regulation by enforcement'. By setting this precedent, regulators are signaling their commitment to upholding stringent standards in the industry.
- In addition to CZ's $50 million personal fine, Binance agreed to pay $4.3 billion fine and implement new measures to prevent similar violations in the future and has undertaken extensive internal reviews and operational adjustments to comply with international financial regulations. This includes enhancing their anti-money laundering protocols and cooperation with global financial authorities.
- Following the announcement of Zhao's sentencing, Binance's trading volume saw an initial dip of 7%, reflecting immediate market reactions and investor sentiment. However, this didn't last along and was followed by a gradual recovery as the market absorbed the impact of the news. Financial analysts have noted that while short-term impacts are evident, the long-term implications hinge on how effectively Binance and similar entities can adapt to increased regulatory expectations.
- Interestingly, on prediction marketplace, polymarket, the majority of betters or 42% predicted that CZ's jail sentence term would be <6months.
CZ said before being sentenced by US District Judge Richard A Jones:
“I failed here. I deeply regret my failure, and I am sorry. I believe the first step of taking responsibility is to fully recognise the mistakes. Here I failed to implement an adequate anti-money-laundering program … I realise now the seriousness of that mistake.”
See: US Treasury Demands DeFi Adhere to Anti-Money Laundering Rules
Dennis Kelleher, Head of the financial reform advocacy group Better Markets (wrote in an email)
"'Crime pays' is the message sent today. Zhao will still get to keep his vast wealth."
Conclusion
This highlights the escalating costs of non-compliance for fintech companies, which can include heavy fines, operational disruptions, significant damage to reputation and prison time. Time will tell if this outcome triggers a turning point in the SECs enforcement by regulation or a continuation.
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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2024 Budget: Crypto ETFs & Registered Accounts Consultation
Consultation | April 29, 2024
Department of Finance is Asking Whether Crypto ETFs Should Be Allowed in Canadian Registered Accounts
Buried in the supplementary notes of the 2024 Federal Budget, there's a key consultation question regarding the potential inclusion of cryptocurrencies as qualified investments in registered retirement and savings accounts like RRSPs and TFSAs. Cryptocurrencies and non-fungible tokens (NFTs) are not considered "qualified investments" for RRSPs under current regulations. However, cryptocurrency-based exchange-traded funds (ETFs) that are listed on designated stock exchanges like the Toronto Stock Exchange (TSX) or the New York Stock Exchange (NYSE) do qualify as RRSP investments. This differentiation is crucial because it allows for indirect investment in the crypto market through regulated financial products that meet the legal standards for RRSPs.
See: Resurgence of Cryptoassets in Canada’s Investment Landscape
- Currently, direct holdings of cryptocurrencies or NFTs in RRSPs could invoke a penalty tax of 50% of the fair market value of each non-qualified investment. However, the Canada Revenue Agency (CRA) has the discretion to waive this penalty under certain circumstances, such as reasonable error or where transactions also result in other taxable events.
- There has been a surge in cryptocurrency-based ETFs, which are considered a safer way to include crypto investments in retirement plans due to their adherence to standard financial regulations and their presence on major stock exchanges. Recently approved in the U.S.; Approved mid-April and starts trading April 30 in Hong Kong; Canada approved a raft of crypto ETFs years ago.
- The federal government is actively seeking public feedback on whether cryptocurrency-based ETFs should be considered qualified investments for various registered plans. This consultation reflects a broader reassessment of the investment limitations imposed by the Income Tax Act on registered plans, which aim to ensure that these savings tools contain safe and stable investments. Historically, these rules have been designed to protect investors by limiting their exposure to more volatile and potentially risky assets.
Consultation Questions (learn more)
Budget 2024 encourages stakeholders to provide feedback on modernizing the rules for "qualified investments" to enhance the clarity and consistency of the Registered Plans system.
See: CSA Updates on Value-Referenced Crypto Assets Regulation
- Whether and how the rules relating to investments in small businesses could be harmonized to apply consistently to all registered savings plans.
- Whether annuities that are qualified investments only for RRSPs, RRIFs, and RDSPs should continue to be qualified investments.
- Whether the conditions that certain pooled investment products must meet to be a qualified investment are appropriate, including the ongoing value of maintaining a formal registration process for registered investments.
- Whether and how qualified investment rules could promote an increase in Canadian-based investments.
- Whether crypto-backed assets are appropriate as qualified investments for registered savings plans.
One key aspect under review is the harmonization of investment rules across different types of registered plans, which could lead to a more streamlined and understandable set of regulations for investors
Why This Matters - Your Voice Counts!
The outcome of this consultation could significantly impact Canadian investors, potentially broadening their investment choices within registered retirement and savings plans. This could offer a way to diversify retirement portfolios with assets that have not traditionally been part of these tax-advantaged accounts. Moreover, it aligns with a global trend of integrating digital assets into mainstream financial products, providing Canadian investors with opportunities that reflect the evolving financial landscape.
Canadians are invited to share their views on this topic by emailing their submissions to the Department of Finance at QI-consultation-PA@fin.gc.ca by July 15, 2024.
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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Hong Kong to Start Trading Bitcoin and Ether ETFs April 30
Crypto ETF Launch | April 26, 2024
Hong Kong's Bitcoin and Ether ETFs to Start Trading Next Week
In a ground-breaking and strategic move, the Securities and Futures Commission of Hong Kong (SFC) approved the first batch of Bitcoin and Ether ETFs in Asia, which has been given the nod to start trading on April 30 next week for both retail and institutional investors. These ETFs are unique in that they allow for direct investments in cryptocurrencies, distinguishing Hong Kong from regions like the U.S., which has only approved derivative-based crypto ETFs (ie., trading in fiat currency). Notably, according to many sources, mainland Chinese investors will unlikely be able to participate due to China's crackdown on cryptocurrencies.
See: Hong Kong’s Crypto Exchange Registration Update
Leading financial firms such as Bosera Asset Management, ChinaAMC, Harvest Fund Management, and HashKey Capital are part of the first group that were approved to manage the Hong Kong ETFs These firms are set to start trading their ETFs on April 30, 2024, offering both local and international investors new avenues for investing in cryptocurrencies directly.
What will be the impact?
The ETFs are predicted to enhance the liquidity and trading volume in Hong Kong’s digital asset markets, potentially transforming the region into a leading crypto investment hub in Asia. Bloomberg Intelligence analysts anticipate the new Hong Kong crypto ETFs will attract approximately $1 billion in net inflows within the first one to two years or 2% of Hong Kong's $50 billion ETF market. By way of comparison, U.S. spot Bitcoin ETFs have attracted approx $12.4 billion in positive net flows since launching a few months ago. Further, a veteran analyst indicated that if mainland Chinese investors gain access, there could be as much as $25 billion flowing into these ETFs
See: “Crypto’s Back”, Stripe to Support On-Chain USDC Payments
Hong Kong has been setting the stage to be a major global crypto hub for some time including a recent push for crypto exchange licensing regime for Virtual Asset Trading Platforms (VATPs). So while the SEC debates approval of a spot Ethereum ETF in the United States, Asia via Hong Kong are ready to go and opening the flood gates, which some predicted long ago.
Conclusion
In summary, the launch of these ETFs in Hong Kong could serve as a major catalyst for crypto market growth, drawing in significant institutional and possibly retail investor interest from Asia and globally.
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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