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 Regulations
KABN North America Partners with UK and Barbados Based Tokenise International to Develop Verifiable Identity Credentials for Regulated Stock Exchange
KABN | Cara Buckspan | Feb 11, 2021
Agreement will help fuel Liquid Avatar's expansion to the UK and Caribbean.
TORONTO, CA and LONDON, UK and ST. MICHAELS, BARBADOS / ACCESSWIRE / February 11, 2021 / KABN Systems NA Holdings Corp. (CSE:KABN)(OTC PINK:TRWRF)(FRA:4T51) (the "Company", "KABN North America" or "KABN NA") (www.kabnsystemsna.com), a North American Fintech solutions company specializing in empowering individuals to manage, control and generate value from their biometrically verified Self Sovereign Identity ("SSI") through its Liquid Avatar (www.liquidavatar.com) platform, is pleased to announce that it has entered into an initial agreement with the Gibraltar holding company of London, UK and St. Michael's, Barbados based Tokenise International Limited ("Tokenise") (www.tokenise.io), a multi-jurisdictional regulated financial services organization.
Together, the Companies are working on initiatives to integrate Liquid Avatar with Tokenise and issue verifiable identity credentials to account holders and to use these credentials to gain access to Tokenise financial and brokerage services and other related platforms, starting in the UK and Barbados.
See: For Digital Assets, Private Markets Offer the Greatest Opportunities
Tokenise operates Kession Capital Limited, a London-based broker dealer that is authorized and regulated by the Financial Conduct Authority in the United Kingdom. Tokenise offers issuers and investors the ability to tokenize crowdfunding programs through the purchase, sale, and exchange of blockchain based securities. Kession also acts as a UK conduit to the Tokenise Stock Exchange, a fully regulated stock exchange in Barbados providing global primary issuance and secondary market trading, promoting financial inclusion and asset diversification, and focusing exclusively on tokenized securities and Tokenise Brokerage to support the onboarding efforts of global investors. Tokenise is also exploring expansion opportunities into Canada.
With Digital Identity applications addressable to up to 100% of the online market, the financial services market is a primary opportunity for Liquid Avatar's Verifiable Credentials Ecosystem announced earlier this month. By accessing a biometrically enabled verifiable identity credential that a user can store in their Liquid Avatar wallet, Tokenise will be able to verify and validate customers allowing them to securely and safely access their accounts based on their known and verified digital identity. The program is expected to commence by early Q3 2021.
Tokenise provides customers and blockchain based issuers with a safe, secure, and regulated supported environment to purchase and exchange securities and is considered to be the first global digital Self Regulated Organization ("SRO") to focus exclusively on tokenized products.
See: Digital Assets: A Framework For Regulation To Maintain The United States’ Status As An Innovation Leader
The Tokenise Stock Exchange will support a wide range of company and program listings including but not limited to tokenized real estate, art, collectibles, businesses and enterprises, celebrity and influencer ventures, cannabis and potentially psychedelics initiatives, digital currency ETFs, and other digitized assets.
"With the rise in awareness and acceptance of digital currencies, like Bitcoin, Ethereum and other Altcoins, it naturally follows that investors will want to investigate and potentially invest in blockchain based securities and Tokenise is eager to support this global, growing opportunity," said Mike Kessler, CEO, Tokenise International Limited. "The Liquid Avatar platform and its verifiable identity credential provides Tokenise with a potentially effective and efficient way to continuously verify our customers and afford them increased security and safety to manage their digitized assets."
Liquid Avatar will be releasing its live, open beta app globally in Google Play and Apple App Store on February 18, 2021, subject to all final approvals. Liquid Avatar will launch in phases, as the Company prepares and tests additional service and program offerings to make it easier for users to become familiar with the Liquid Avatar platform, Self Sovereign Identity and Verifiable Credentials.
"We are excited to have the opportunity to work with Tokenise to support their growing global needs for customer verification and validation and account authentication," said David Lucatch, CEO, KABN North America. "We believe that by linking Liquid Avatar and verifiable identity credentials, users can use their biometrics and digital credentials to sign in and access their accounts from multiple devices anywhere in the world, potentially providing increased protection of their digital information and valuables."
Liquid Avatar, available at no cost to consumers, makes it easy for individuals to start and maintain the process of managing their SSI/digital identity while giving users the ability to share it with their friends, family, colleagues, and others easily, safely, and cryptographically secure through biometrically enabled Self Sovereign Identity tools and services.
About Tokenise International Limited - www.tokenise.
Working with and in fully regulated environments to meet the needs of the emerging blockchain based securities markets, Tokenise International Limited is a financial services group, operating in multiple jurisdictions. The firm's programs consist of:
Kession Capital Limited, an authorized and regulated by the Financial Conduct Authority in the United Kingdom (FRN 582160). Kession currently operates as a regulated hosting platform and oversees several clients across the investment management industry, from crowdfunding platforms to a national European stock exchange.
UK based Tokenise crowdfunding platform which, under its regulatory permissions, has the ability to manage the purchase, sale and exchange of tokenized securities.
Barbados based Tokenise Stock Exchange International Limited (formerly Daxnet BB (Barbados) Limited) which is a self-regulated organization which is licensed to operate as a fully regulated stock exchange in Barbados providing primary issuance and secondary market trading promoting financial inclusion and asset diversification and focusing exclusively on tokenized securities and is considered to be the first global digital SRO to focus exclusively on tokenized products.
The Company also owns and operates Barbados based Tokenise Brokerage (formerly Kession Capital International Limited) providing global access to investors who wish to use the Tokenise Stock Exchange and provides direct market access to a global customer base.
About KABN Systems NA Holdings Corp - www.kabnnaholdco.com
KABN Systems NA Holdings Corp. through its wholly owned subsidiary KABN Systems North America Inc. focuses on the verification, management and monetization of Self Sovereign Identity, empowering users to control and benefit from the use of their online identity.
Liquid Avatar is a verified Self Sovereign Identity platform that empowers users to create high quality digital icons representing their online personas. These icons allow users to manage and control their digital identity and Verifiable Access and Identity Credentials, and to use Liquid Avatars to share public and permission based private data when they want and with whom they want. www.liquidavatar.com
KABN North America has a suite of revenue generating programs that support the Liquid Avatar program, including KABN KASH a cash back and reward program that has over 300 leading online merchants and coming soon, an integrated offering engine. In Canada, KABN also has the KABN Visa Card, a "challenger banking" platform that allows users to manage and control a range of financial services for traditional and digital currencies. The Company is currently exploring expansion of the KABN Visa program to other geographic regions, including the USA.
KABN Systems NA Holdings Corp. is publicly listed on the Canadian Securities Exchange (CSE) under the symbol "KABN" (CSE:KABN).
The Company also trades in the US under the symbol "TRWRF" and in Frankfurt under the symbol "4T51".
If you have not already joined our mailing list and would like to receive updates on KABN Systems NA Holdings Corp., please click here to join!
For more information, please visit www.kabnnaholdco.com or www.kabnsystemsna.com
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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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A Brilliant Fintech Future – Banking on Stablecoins
Finance Magnates | Maxim Bederov | Feb 3, 2021
There is no recent fintech concept that has taken root in the banking community quite like the stablecoin. Of all the technical innovations brought forth by the invention of Bitcoin, this has succeeded in capturing the greatest attention of powerful financial leaders across the globe.
While Bitcoin as peer-to-peer electronic cash was specifically designed to evade banks and bankers and bypass the need for these middlemen to exist at all, a stablecoin at its core does not pose the same explicit existential threat. That is not to say that there are not risks, of course. But, you get my point.
See:
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OCC says Federally regulated banks can use stablecoins to conduct payments and other activities
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UK Consultation (Mar 21, 2021): Regulatory Approach to Cryptoassets and Stablecoins
Central bankers of all stripes now agree that stablecoins will radically alter the payments landscape. At the European Central Bank, for example, executive board member and noted Italian economist, Fabio Panetta believes that:
“Global stablecoins could drive further innovation in payments, responding to the need for cross-border payments and remittances that are more efficient and cheaper.”
And over in the US, we have just seen a slew of guidance from the national bank regulator, the Office of the Comptroller of the Currency (OCC), which not only allows banks to custody crypto assets for their clients but now says regulated bank entities can use stablecoins to settle cross border payments, participate as nodes in blockchain networks to help verify transactions and even issue their own stablecoins. That last bombshell news came in the form of Interpretive Letter 1174, by the way.
Leading that agency for the moment (and due to step down any day now, according to multiple reports) is Brian Brooks. It will not be lost on the eagle-eyed among you that Brooks is a poacher-turned-gamekeeper.
Before taking up the role as acting Head of the OCC in May 2020, he was Chief Legal Counsel for the San Francisco crypto exchange Coinbase. And of course, since 2016 Coinbase has been operating its own US dollar-backed stablecoin: the USDC.
Bank on This
Now the best banks in Canada are increasingly interested in stablecoin markets, and institutions are interacting in ever greater numbers with these payment rails.
So, this is the situation. With the OCC guidance, US banks can not only legally use stablecoins to facilitate payments, but may also issue their very own stablecoins. JP Morgan was ahead of the curve here with the JPM Coin, an institution-to-institution stablecoin that became commercially available in October 2020, almost two years after it was announced.
See:
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Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements
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Are Stablecoins Better Than Bitcoin?
And, we can see this strategy starting to play out in Europe, too. As in the US, lightning-speed innovation in Germany has followed regulatory clarity.
The financial regulator, BaFin enforces the laws of the land, and as of 1 January 2020 incorporated crypto custody businesses into the German Banking Act. This legalises regulated entities to custody crypto assets for their clients.
As reported, one of the world’s oldest bank institutions, Munich-based Bankhaus von der Heydt (BVDH), launched a Euro-backed stablecoin on the Stellar blockchain. The reason? To use this fintech modernisation ‘to expand its digital asset offering to clients’. The bank holds fiat currency transfers in escrow accounts, which then trigger the stablecoin issuance. Because of strict KYC requirements, this Euro-backed stablecoin will not be made available to trade on exchanges.
Bank spokesman, Lukas Weniger argues the point that the main flaw in current stablecoins is the lack of a licensed banking institution to guarantee them.
“The stablecoin is a very sensitive product, and requires a lot of trust from users,” he said. “If we look at other projects, for example, Tether, there is a trust issue.”
Tether remains a disaster waiting to happen. The USDT stablecoin provides some 80% of the liquidity in all Bitcoin trading, according to the Wall Street Journal, and its 1:1 convertibility with the US dollar has long been disproven. Trust has been broken. As Coindesk reported on 11 January 2021, Tether minted a record 2 billion USDT in just one week. How long this can continue is anyone’s guess.
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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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WEF Launches Digital Currency Governance Consortium and 2021 Vision
WEF | Feb 2021
Background
In the near term, the public sector will be making important decisions that will shape the trajectory of digital currency development. These include decisions related to regulation, improving efficiency, resilience, and competitiveness of payment systems, and whether to issue a central bank digital currency (CBDC). Policymakers are also assessing how to support responsible digital currency innovation while safeguarding or promoting financial stability, financial inclusion and consumer protection.
See:
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Do Central Bank Digital Currencies need a blockchain operating system?
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China’s Central Bank and SWIFT arrange JV called Finance Gateway Information Services
In response to these dynamics, the Forum’s Shaping the Future of Blockchain and Digital Assets Platform is assembling stakeholders across the public and private sectors to explore and co-design global frameworks that address the risks, gaps, and opportunities in digital currency governance.
The Opportunity
The Digital Currency Governance Consortium centres on the discussion and development of relevant and timely global frameworks for digital currency governance that benefit from multi-sector input and co-design. In its work, it will work on the following content:
Stablecoin and CBDC Capabilities
This working group will assess the capabilities of stablecoins and CBDCS and the value propositions for various use cases. It may also assess their limitations and the risks they introduce into the monetary system. Topics include: • Assessment of the value of stablecoins and CBDCs, with a particular emphasis on financial inclusion and providing benefits to the financially under-served as compared to existing options. • Exploration of the viability of stablecoins for aid delivery and disbursement.
Regulatory Choices
Fragmented regulation may create uneven competitive environments and opportunities for illicit activity in certain jurisdictions, while stifling innovation by well-intentioned actors who are reticent to experiment without regulatory certainty. This working group will examine how we can establish the right regulatory, supervisory, privacy, and consumer protection guidelines and policies over new forms of digital currencies. The working group will also assess the role of the public sector in the era of digital currency growth, especially the public-private division of responsibility.
Read:
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The Good, the Bad and the Ugly of Central Bank Digital Coins (CBDCs)
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Better to get it right than to be first with CBDC, says US Fed chair
Technology Choices
This working group will investigate the right technological frameworks for operationalizing digital currencies. Topics will include architecture, interoperability, and privacy, and centre on the following: • Framework helping to guide central banks in their analysis around CBDC technology platforms and providers. • Mapping of the spectrum of privacy and confidentiality options and approaches that are technically feasible and available for CBDC. • Exploration of various forms of interoperability and definitions for what it means for a digital currency issuer to say that their system is "interoperable."
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Download the 36 page PDF WEF Digital Currencies Governance Consortium --> 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, 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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First Major DeFi Hack of the Year Explained
The Defiant | Owen Fernau | Feb 5, 2021
The latest on the Yearn Finance exploit below.
Yearn Finance, the yield aggregation protocol founded by Andre Cronje, has been hacked. One of the platform’s so-called vaults lost $11M, and the attacker got away with $2.8M.
It’s the first DeFi hack of the year, after $100M worth of attacks in the sector last year, according to a report by Ciphertrace. About half of the exploits, including this one from Yearn, have used flash loans (loans which don’t require collateral as long as they’re returned on the same block).
While the Yearn team has yet to release a postmortem, the attack’s nature could be categorized as an arbitrage. The hacker used a flash loan to borrow millions in crypto assets, use those assets as collateral to borrow more crypto, then repeatedly deposited those borrowed assets in a Yearn pool. The exploit consisted in manipulating the Dai rate in the pool, and benefitting from that rate by exchanging the liquidity provider tokens earned for stablecoins.
See: Are Stablecoins Better Than Bitcoin?
Most if not all DeFi attacks involve complex financial engineering, manipulating token prices, or liquidity in token pools, to get crypto at extremely favorable rates. It highlights the need for code in DeFi protocols to be ironclad, which is often far from reality. These projects are sometimes hacked together over the weekend and released without formal audits or tests —a “test in prod” strategy which has been championed by Yearn’s founder himself.
Step by Step
Here’s how it went down.
The attacker used flash loans to borrow 116K Ether from margin trading platform dYdX, and 99K from lending platform, Aave.
They were then able to use 215K ETH, worth ~$342M, as collateral to borrow 134M USDC and 129M DAI from lending platform, Compound Finance.
The attacker then added all of the borrowed USDC and 36M of the borrowed DAI to Curve Finance’s 3-token USDC/DAI/USDT pool. They then withdrew 165M USDT from the Curve pool.
See: Fidelity-backed crypto security startup Fireblocks launches ‘Secure Asset Transfer Network’
Then the attacker repeated the strategy of depositing the remaining 93M DAI, borrowed from Compound into Yearn’s yDAI vault, adding the 165M USDT back into the Curve 3-token stablecoin pool (3pool), withdraw 92M DAI from the yDAI vault, then withdrawing the 165M USDT again from the Curve pool.
Each time the hacker executed the repeating part of the strategy they gained more Curve’s DAO Token, which they later converted to stablecoins, eventually netting them $2.8M, and losing Yearn’s vault, for whose deposits are now disabled, $11M.
Under the Hood
Key to understanding the exploit is that Yearn’s yDAI vault automatically deposits DAI into Curve’s 3pool, which the attack had already heavily saturated with USDC and DAI. In adding the third asset, USDT, to the pool, DAI is devalued, according to Curve’s protocol mechanics.
After withdrawing the DAI from yDAI, at a small loss due to the devaluation, and also withdrawing the USDT, USDC, and other DAI from the 3pool, the attacker reaps the extra rewards of Curve’s DAO Tokens for providing liquidity during a time when the DAI rate strayed from the pool's other two assets.
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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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Crazy Rich Bitcoin Gold Rush: Rise (and Fall) of BTC Billionaire Arthur Hayes
Vanity Fair | | Feb 4, 2021
The BitMEX cofounder created a cryptocurrency exchange that has traded trillions. Now he’s wanted by U.S. authorities, and insiders wonder whether he and his partners are villains—or victims of a two-tiered justice system that favors big banks over brash outsiders.
Crazy Rich
Arthur Hayes lives large. Like Bobby Axelrod-in-Billions large. Just replace New York with Hong Kong and infuse it with a dose of Silicon Valley—where unicorns spring from the minds of irrepressible company founders—and, well, you get the picture. One minute Hayes is hitting the powder in Hokkaido, the next he’s crushing it on a subterranean squash court in Central—Hong Kong’s Wall Street. And all the while he keeps one eye trained on an obscure-sounding currency exchange that he built out of thin air and through which more than $3 trillion has flowed.
Screen-star handsome and fabulously wealthy, the African American banker turned maverick personifies the contemporary fintech pioneer. But the feds describe Arthur Hayes differently: a wanted man who “flouted” the law by operating in the “shadows of the financial markets.” Hayes’s indictment was unsealed in October, and he remains at large in Asia as prosecutors in New York hope to arrest him and try him on two felony counts, which carry a possible penalty of 10 years in prison.
See:
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Ep20-Jan 11: Bitcoin Backed Loans and 2x Credit – Putting Your Crypto to Work
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The Future of Stakeholder Capitalism and Why GameStop is a Syllabus
This is a tale of new money versus old, financial whiz kids upstaging banking’s old guard, and American authorities attempting to apply 20th-century laws to 21st-century innovation. Prosecutors allege that Hayes and his business partners violated the Bank Secrecy Act by failing to implement and maintain an adequate anti-money-laundering program—to weed out bad actors and dirty money. Meanwhile, Hayes’s colleagues in the cryptocurrency world believe he is being punished for building an ingenious product that has baffled lawmakers, bedeviled regulators, and—once it became wildly popular—posed a threat to some of the markets’ biggest players. Adding to the chorus of voices are some high-powered legal experts who consider the case United States of America v. Arthur Hayes to be largely unprecedented.
At a time when the SEC is seemingly doing the bidding of Wall Street titans—eager to punish the unwashed masses of day traders for scuttling banks’ and hedge funds’ trading positions on GameStop and other stocks—Hayes might just be patient zero when it comes to exposing the hypocrisy in high finance that is now coming into sharp relief.
The Crypto Gold Rush and a Backpack Full of Cash
Hayes, 35, went radio silent in October. But the crypto condor has not always been so elusive. Born to middle-class parents who worked for General Motors and were beholden to the ever-changing fortunes of the auto giant, he split his formative years between Detroit and Buffalo, where his mother, Barbara, moved mountains to get her gifted son into Nichols School, a leafy private institution founded in 1892. “He succeeded at everything, from his studies [to] the sports field, to making lasting friendships,” reads a testimony, featuring Barbara, on one of the fundraising pages of the school’s website. “Nichols gave him the setting, the stimulation, and at one point, the scholarship to thrive.”
Hayes, in return, has given back: underwriting a scholarship that ensures “a deserving student will be able to experience the excellence of a Nichols education and the lifelong benefits it brings.”
After attending the Wharton School of business, he headed off to Hong Kong, where he worked at Deutsche Bank and Citibank as a market maker for exchange-traded funds, or ETFs—hybrid securities that, not unlike mutual funds, diversify an investor’s risk but can be traded like stocks. Hayes was just hitting his stride when a pink slip arrived in May 2013.
See: The case against BitMEX is a compass pointing towards the future of crypto regulation
“Bankers tell you everybody has a bullet with their name on it,” he explained one afternoon over tea at the Marina Bay Sands in Singapore—the iconic hotel featured in the finale of Crazy Rich Asians. He was wearing his standard attire: skintight T-shirt, jeans, and a pricey timepiece (a Hublot Big Bang).
“I wasn’t married, had no kids, no obligations. I had been an investment banker, so I wasn’t sleeping on the streets. I wanted to build something.”
(I interviewed Hayes and some of his cohorts in Hong Kong, Singapore, and New York in 2018 and 2019. Since the October indictment, I have spoken at length with insiders who know and are in communication with Hayes and his two indicted business partners, Ben Delo and Sam Reed. A number of these sources requested anonymity so as not to prejudice pending legal proceedings; on the advice of counsel, Hayes, Delo, and Reed opted not to comment for this story.)
But back to that pink slip. Eight years ago Hayes, out of a job, decided to go solo, combining his knack for designing novel financial instruments with a newfound passion: cryptocurrency. Specifically, Bitcoin.
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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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Kraken report: Crypto Yields – Deep Dive on DeFi
Kraken | Report | Feb 2021
The rise of Decentralized Finance (DeFi) has not only brought a newfound wave of innovation to the broader crypto ecosystem, but also the opportunity for savvy investors to generate staggering returns.
Like all markets, especially those in a state of adolescence, DeFi’s reward isn’t without its risks. After all, depositing assets in internet protocols is not the same as placing money on a trusted exchange or a bank.
See:
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DeFi Market Cap Reaches $45 Billion as Token Prices Shoot Up
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Joint Statement from CSA and IIROC on Recent Market Volatility
With this in mind, Kraken Intelligence, our team of in-house research experts, has published their second report in a multi-part “Crypto Yields” series. This time around, the team analyzed the makeup of DeFi lending to help market participants navigate this exciting digital asset sector, offering a digestible and comprehensive assessment of the associated counterparty risk, the expected returns, the liquidity, and the variety of ways DeFi can help you earn on your assets.
One of the most vulnerable attack vectors is price manipulation - an area we explain in great detail in this report. To further transparency and security with these platforms, Kraken has also released the Oracle, a utility that verifies data used to price DeFi contracts.
By downloading this report, we anticipate you will have a greater understanding of how DeFi markets work, the unique market dynamics of DeFi lending, why DeFi is a promising and rapidly growing part of the industry, and the risks innate to DeFi.
We cover the following opportunities and risks:
- Smart Contracts – As human written code is prone to errors, hackers and malicious actors can take advantage of poorly written code. To mitigate these single points of failure, participants and lending platforms can be proactive in analyzing and managing their level of exposure to such risks.
- Collateralization – Lending in decentralized finance is only as strong as the source of the liquidity. In times of volatility, liquidity is often put to the test. When market activity picks up, price can fluctuate wildly or funds may not be accessible. To prevent such scenarios, many loan providers are taking proactive steps with overcollateralized loans and dynamic interest rates.
- Counterparty – One way to determine the level of trust the market has placed on a counterparty is by comparing prices on different platforms. Once you identify the risk premium associated with a particular platform, you can decide if continuing to use it is in your best interest.
- Governance – The entity who sets the rules of the platform has a great deal to do with the associated risks. The Maker and Synthetix Foundations are two examples of central structures who through their tokens have transferred power democratically to their respective communities. Changes to the system are now voted on by the community to decentralize the risks of their platforms.
- Liquidity Pools - Price discrepancies in automated market maker exchanges are attractive to arbitrageurs seeking to buy up the difference. That difference eventually creates a permanent loss once the liquidity is withdrawn. Stablecoins have become an attractive solution for these pools as there is less volatility among prices.
Download the 21 page PDF Kraken report --> Now
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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Joint Statement from CSA and IIROC on Recent Market Volatility
CSA and IIROC | Release | Feb 1, 2021
TORONTO - The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) are closely monitoring how extreme price movement of certain stocks may be contributing to volatility in Canada’s capital markets.
We will take appropriate regulatory action to protect investors if we identify that abusive or manipulative trading activity may be taking place.
With strong market oversight and surveillance infrastructure in place, Canadian regulators are working together closely to protect investors while ensuring that the markets operate in an orderly manner and with integrity. We are monitoring market activity in real-time to support healthy Canadian capital markets and to protect investors. Canada’s capital markets remain strong.
See: The Future of Stakeholder Capitalism and Why GameStop is a Syllabus
The CSA and IIROC continue to be in close contact with regulators domestically and internationally, recognizing that trading and market volatility is not confined by borders.
We also continue to be in close contact with regulated entities, and will continue to monitor issuers’ compliance with disclosure requirements for anything material that might affect their stock prices.
We caution investors to consider the source of information and advice they are relying on to make investment decisions. Online chat rooms are unregulated and may contain information that is inaccurate or inappropriate for some investors. Investors should always check the registration of any person or business trying to sell them an investment or give them investment advice. To do this, investors can visit AreTheyRegistered.ca or IIROC’s database of advisors working for IIROC regulated firms.
The CSA and IIROC will continue to work to protect investors from improper and unfair practices in the capital markets.
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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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