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
Nasdaq Seeks SEC Approval for Tokenized Stock Trading
Tokenization | Sep 9, 2025
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Nasdaq Files With SEC to Tokenize All Stocks and ETFs
On September 8, 2025, Nasdaq announced in a Newsroom Q&A with Chuck Mack that it filed with the U.S. Securities and Exchange Commission (SEC) to allow every listed stock and exchange-traded fund on its markets to settle in tokenized form. The news is significant and was also confirmed by Reuters and if approved would be the first time a U.S. national exchange was keen to integrate blockchain settlement into the regulated equity system. If approved, the change would affect securities representing $61.6 trillion in U.S. market capitalization as of Q2 2025.
Nasdaq Tokenization Proposal Explained
Under the 19b-4 filing to the SEC, Nasdaq proposes that each stock and ETF maintain the same CUSIP (unique 9 digit alphanumeric identifier assigned to financial instruments in the States and Canada, such as stocks, bonds, ETFs) whether traded in traditional or tokenized form. At order entry, brokers could flag trades for tokenized settlement. Execution would take place on the same order book, under the same rules, with identical rights and benefits. After execution, the Depository Trust Company (DTC) would convert the security into a blockchain token and record ownership.
See: US Puts Economic GDP Data On Nine Blockchains
Chuck Mack, Nasdaq’s Senior Vice President of North American Markets, explained the approach and stressed that from an investor’s perspective, nothing changes in how trades are placed or executed. Only the method of settlement shifts to a tokenized form:
“Our goal is to integrate digital assets into Nasdaq’s current infrastructure and systems, which will advance financial innovation while maintaining stability, fairness, and investor protection. If investors and market participants express demand for a particular approach, and we can implement it in a way that preserves market integrity, then we want to give them that choice.”
Nasdaq has indicated the first token-settled trades could occur by Q3 2026, provided that DTC’s new systems are ready. This would embed blockchain settlement directly into the most liquid equity market in the world, where average daily trading volume reached 18.4 billion shares in Q2 2025.
The filing follows the U.S. move to T+1 settlement in May 2024. Tokenization builds on that progress by layering blockchain into existing systems rather than replacing them. SEC Commissioner Hester Peirce has made clear that tokenized securities must still comply with securities laws. One way to look at tokenization is that it's not a regulatory shortcut but rather a modernization of existing infrastucture.
Impact on Canada’s Fintech and Capital Markets
For the U.S., the importance lies in scale and precedent. With more than 5,400 listed companies, Nasdaq’s proposal would normalize blockchain-based settlement within the core market system. Tokenization could deliver operational savings, stronger audit trails, and new forms of fractional participation, all without fragmenting liquidity.
See: Europe’s Fintech Reset at Point Zero Forum
For Canada, Nasdaq's interest echoes the Ontario Securities Commission’s exploration of tokenized long term funds, aimed at improving investor access to complex assets. If Nasdaq’s model is approved, Canadian fintechs could explore cross-border tokenized products, while regulators will need to address custody, wallet security, and investor protections to keep pace with these developments.
Outlook
Next steps is for the SEC to open the filing for public comment. If approved, tokenized settlement could begin by late 2026. For NCFAs community, this is a watershed moment as tokenization moves from pilot projects and into mainstream market regulation. The implications are significant and real with efficiency gains, lower costs, competitive pressure on other exchanges, and new opportunities for cross-border fintech innovation.
For Canada's fintech and digital asset ecosystem, aligning with these changes will be critical to remain competitive in the next phase of global capital 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 aa 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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Canadian Banks and Fintechs Back Regulated Stablecoin
Stablecoins | Sep 8, 2025
Tetra Digital Secures $10M to Launch Canada’s First Regulated Stablecoin With Major Backers
On September 8, the Tetra Digital Group announced that they raised $10 million from some of Canada’s most influential fintech and financial service leaders to launch the country’s first regulated stablecoin. Investors include Urbana Corporation, Wealthsimple, Purpose Unlimited, Shakepay, ATB Financial, National Bank of Canada, and Shopify. The strategic initiative aims to launch a Canadian dollar stablecoin in early 2026, pending regulatory approval.
See: OSFI Drafting New Framework to Regulate Stablecoin Issuers
Backed 1:1 by reserves held in Canada, the stablecoin will combine regulatory leadership, enhanced security, and domestic sovereignty to position Canadian businesses for success in the global digital economy.
Canada’s Financial Leaders Back Regulated Stablecoin
This represents the first time in Canada that a regulated financial institution has partnered to issue a stablecoin. The initiative brings together a coalition of banks, fintechs, and technology leaders in a homegrown effort to create a trusted Canadian digital payment option. The project aligns with international efforts in other G7 countries and is designed to meet strict Canadian regulatory standards.
Didier Lavallée, CEO of Tetra Digital Group:
“Today marks a pivotal moment for Canadian financial innovation. By bringing together many of Canada’s most trusted financial institutions and companies, we’re not just launching a stablecoin – we’re supporting homegrown solutions, built by Canadians, for Canadians and ensuring we maintain economic sovereignty.”
See: The Diverging Paths of CBDCs, Privacy, and Global Payments
Blair Wiley, Chief Legal Officer at Wealthsimple
“Tetra has sparked nationwide enthusiasm across century-old institutions, tech leaders, traditional financial services and those at the forefront of financial innovation. The depth of experience at the table will create a truly Canadian stablecoin solution that will open up new opportunities for businesses, consumers and homegrown talent.”
Jean Amiouny, CEO of Shakepay:
“At Shakepay, we’ve always believed in building trusted financial infrastructure that gives Canadians more choice in how they move, hold, and grow their money. This partnership reflects our commitment to pioneering technology that expands access to modern financial tools and doing so with the regulatory safeguards and user trust Canadians expect.”
How a Canadian Stablecoin Could Benefit Businesses and Consumers
With trusted issuance and custody of the stablecoin from Tetra Trust and digital tools from Tetra Unity, the group is building a complete system for digital assets. Tetra Unity is the company’s platform that helps connect and manage different digital asset services, making it easier for businesses to use these tools in one place. Combined they create a safe and compliant foundation that also gives Canadian companies the room to test new ideas, build services, and compete in the global economy with confidence.
See: Crypto Enters the Core of Canadian Payments
For businesses, a Canadian stablecoin could reduce payment processing costs, speed up settlement times, and simplify cross border transactions. Companies that move money frequently whether for payroll, supplier payments, or customer refunds would gain a faster, lower friction option pinned to the Canadian dollar.
Consumers will also benefit from cheaper and more efficient remittances, as well as more flexible ways to pay and receive funds.
In Conclusion
If approved, the Canadian stablecoin will be a huge boon for the country's digital economy, positioning itself along side other G7 countries advancing regulated stablecoin frameworks and would boost Canadian businesses participating in global commerce. Wonderful to see collaboration between both established banks and leading fintechs in a project that requires consensus on the future of digital payments.
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 and CFTC Open Door to Spot Crypto Trading
Crypto Regulation | Sep 3, 2025
Image: Freepik/DC Studio
SEC and CFTC Clear Path for Spot Crypto Trading on Regulated Exchanges
On September 2, 2025, Staff from the SEC’s Division of Trading and Markets and the CFTC’s Divisions of Market Oversight and Clearing and Risk issued a joint statement announcing that under existing law registered U.S. exchanges are not prohibited from listing and trading certain spot crypto asset products. The move is tied to the SEC’s Project Crypto and the CFTC’s Crypto Sprint, and follows recommendations from the President’s Working Group on Digital Asset Markets to strengthen U.S. leadership in blockchain innovation and finance.
The statement makes clear that regulated venues such as national securities exchanges, designated contract markets, and foreign boards of trade can facilitate spot crypto trading without new legislation. In doing so, the agencies say they want to provide market participants with more choice and keep blockchain innovation within U.S. borders.
See: U.S. Maps Out Plan to Lead World in Crypto
Staff emphasized that this is a nonbinding staff view, and not a rule or regulation, but invited firms to bring filings and proposals for prompt review. The joint effort is aimed at balancing innovation with investor and customer protection.
Regulators Outline Expectations for Participants
For market participants, the agencies highlighted several expectations:
- On margin, clearing, and settlement, staff confirmed that clearinghouses can partner with custodians to maintain customer accounts and said they are open to questions from SEC registered clearing agencies and CFTC registered derivatives clearing organizations
- On monitoring and surveillance, the agencies encouraged trading venues to share reference pricing data to improve oversight
- They also flagged the public dissemination of trade data as a critical element for transparency, and noted that fair and orderly market standards should
- Staff expressed their willingness to support innovation so long as protections remain in place for retail investors and customers
Implications and Reactions
According to analysis from Shearman and Sterling, the coordinated message is an important step toward clarity and a more constructive approach by regulators, potentially opening the way for spot digital assets to be listed on traditional U.S. exchanges like NYSE and Nasdaq.
Industry commentary highlight that over 92 crypto ETF applications are already before the SEC, including more than a dozen targeting XRP and other assets, and many of these could benefit directly from the new staff position.
See: U.S. Prepares to Count Crypto in Mortgage Rules
For Canada, this development matters. If major U.S. exchanges begin offering spot crypto products under a coordinated regulatory approach, it will put further pressure on Canadian markets and regulators to keep pace. Canadian fintechs and exchanges would face heightened competition if retail and institutional investors move liquidity south. Without similar clarity, Canadian platforms risk falling behind in attracting capital, innovation, and building global relevance.
Conclusion
The SEC and CFTC’s joint staff statement isn't a new binding law but it sends a clear message that there's room for regulated spot crypto markets in the United States. For entrepreneurs, investors, and regulators in Canada, buckle up because competition in crypto and digital finance markets could anchor the next several years to come.
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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VersaBank USA Launches Tokenized Deposits Pilot
VersaBank Release | Sep 2, 2025
Image: Freepik
VersaBank USA Pilots Tokenized U.S. Deposits With FDIC Backing
On August 26, 2025, VersaBank that its U.S. subsidiary VersaBank USA has begun piloting a tokenized U.S. dollar deposit product called USDVB. The test program is designed to confirm that USDVB works smoothly, meets security standards, and complies with U.S. banking rules.
See: Citi and BofA Plan Stablecoins as Regulation Advances
Testing will start with thousands of small internal transactions before expanding to selected external partners and their clients. The pilot is expected to continue through 2025, and if successful the bank will seek approval from the Office of the Comptroller of the Currency ahead of a commercial launch.
David Taylor, Founder and President, VersaBank:
“Our USDVB DDRs, developed in conjunction with law enforcement, represent the next step in the evolution of digital assets for both deposits and payments, and, importantly, a superior alternative to stablecoins based on their one‑for‑one representation of actual cash on deposit with our Bank, the legal ability to pay interest, and FDIC insurance.”
How USDVB Differs From Stablecoins
Unlike most stablecoins which are issued by private companies and may not always have full backing, USDVB is a direct digital version of deposits held at a federally chartered bank. That means:
- Each token is matched 1:1 with U.S. dollars at the bank
- The deposits can earn interest and carry FDIC insurance
- Issuance and management are handled through VersaBank’s own secure systems, including the VersaVault digital vault and VersaView e-wallet
- The tokens will be available on multiple blockchains, including Algorand, Ethereum, and Stellar, with high quality encryption in place
See: Quantum Safe Stablecoins Meet Real Time Finance Needs
VersaBank’s President, David Taylor, called USDVB one of the first real steps toward a tokenized deposit issued by a U.S. national bank. He noted that licensed banks are best positioned to keep digital assets safe while giving customers the benefits of regulated banking. For fintechs, payment providers, and financial institutions, USDVB offers a pathway into digital commerce with a solution that combines the trust of traditional banking with the flexibility of blockchain.
Why It Matters
Bank-issued digital deposits are moving closer to reality, seeking to provide a more stable and compliant alternative to private stablecoins.
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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XRP Price After Ripple vs SEC Lawsuit – Impact & Market Outlook
Aug 29, 2025
The Ripple vs. SEC lawsuit has been one of the most closely watched legal battles in the cryptocurrency industry. After nearly five years of uncertainty, the U.S. Securities and Exchange Commission (SEC) reached a settlement with Ripple Labs in August 2025. Ripple agreed to pay a $125 million fine, ending a prolonged dispute over whether XRP should be classified as a security. For investors, institutions, and regulators alike, this decision marked a turning point for the digital asset.
In the wake of the settlement, XRP surged above $3.30 before stabilizing slightly lower, with trading volumes and institutional interest spiking sharply. With regulatory clarity now in place, the market is assessing whether XRP is poised for sustained growth or if short-term speculation is fueling most of the momentum.
This article explores the post-settlement price action, institutional adoption trends, technical analysis, and the risks investors should keep in mind when considering XRP’s market outlook.
The Ripple vs SEC Settlement Explained
The legal battle began in December 2020 when the SEC accused Ripple Labs of conducting an unregistered securities offering through sales of XRP. Ripple countered that XRP was a digital asset designed for payments, not an investment contract. For years, this uncertainty suppressed investor confidence and limited XRP’s integration into mainstream financial institutions.
On August 8, 2025, the SEC and Ripple reached a final settlement. Ripple agreed to pay a $125 million fine, without admitting or denying wrongdoing. Crucially, the deal provided regulatory clarity: XRP is not classified as a security when traded on secondary markets, removing a major barrier for U.S. exchanges, institutional investors, and payment providers.
This resolution immediately influenced market sentiment, driving a strong rally in XRP and opening the door for broader adoption.
XRP Price Action Post-Settlement
Following the announcement, XRP surged above $3.25, peaking near $3.32 before stabilizing in the $3.14–$3.22 range. Trading volumes spiked more than 200% in 24 hours, surpassing $12 billion. This surge reflects renewed confidence from both retail and institutional investors.
For investors tracking digital assets, monitoring real-time benchmarks such as XRP price USD provides valuable insight into ongoing volatility and market sentiment. The legal clarity appears to have removed a key ceiling that previously capped XRP’s growth potential.
Additionally, derivatives markets saw a 15% increase in open interest, reaching nearly $6 billion. This suggests traders are positioning for further moves, with many anticipating bullish continuation.
Institutional Interest and Adoption
One of the most significant outcomes of the settlement is the restoration of institutional confidence in XRP. For years, major U.S. exchanges delisted the token due to regulatory risk. Now, with clarity from the SEC, institutions are showing renewed interest.
Trading firms and liquidity providers have increased exposure, and some payment service providers are considering XRP as a cross-border settlement tool once again. This institutional momentum mirrors broader trends in the crypto market, where regulatory clarity often leads to higher participation. For context, comparing digital benchmarks such as Bitcoin price USD against XRP can provide perspective on how investors weigh opportunities between established leaders and high-upside altcoins.
Financial institutions are particularly interested in XRP’s utility as a bridge currency for remittances and international payments. With legal uncertainty resolved, the token could see renewed integration into enterprise-level payment solutions.
Technical Analysis and Market Forecasts
From a technical standpoint, XRP faces a critical resistance zone near $3.35. Analysts argue that if the token can establish this level as new support, the next upside target could reach between $4 and $5. Several market strategists point to bullish fractal patterns reminiscent of XRP’s rally during the 2017 bull market, which saw exponential gains.
Some analysts even project medium-term targets of $8, with long-term possibilities of $10 or more, provided XRP maintains strong momentum and adoption growth. These forecasts, however, remain speculative and depend on broader crypto market conditions, including Bitcoin’s trajectory and macroeconomic factors such as interest rates and regulatory policies.
Key technical indicators to watch include:
- Relative Strength Index (RSI): Currently trending near overbought levels, suggesting possible short-term pullbacks.
- Moving Averages: XRP is trading above its 50- and 200-day moving averages, a bullish signal.
- Volume Trends: Sustained high volume could confirm accumulation and institutional demand.
Market Drivers Behind XRP’s Growth
Several factors are contributing to XRP’s momentum:
1. Regulatory Clarity
With the SEC settlement finalized, U.S. exchanges can now list XRP without fear of litigation. This regulatory green light has major implications for liquidity and adoption.
2. Institutional Participation
Data shows a sharp increase in institutional trading volume, with open interest in derivatives markets climbing steadily. This suggests long-term players are taking positions rather than short-term speculation alone.
3. Broader Crypto Market Conditions
XRP’s rally is occurring in a context where Bitcoin and Ethereum continue to dominate the sector. If Bitcoin remains strong, it often sets the tone for altcoin performance, providing XRP with a favorable environment.
4. Utility in Payments
Unlike many altcoins driven purely by speculation, XRP has practical use cases in cross-border payments and settlement. This differentiates it from tokens that rely solely on hype cycles.
Risks and Uncertainties
While optimism is high, it is important to recognize potential risks:
- Volatility: XRP has a history of sharp price swings, and the recent rally could face corrections. Sudden downturns are common in crypto markets.
- Regulatory Landscape: Although the U.S. case is settled, other jurisdictions could impose restrictions on XRP or similar tokens.
- Market Dependence: XRP’s growth may depend heavily on Bitcoin’s performance. If Bitcoin weakens, altcoins typically follow.
- Speculative Excess: Analyst projections of $8–$10 rely on technical and historical patterns, which may not play out under current macroeconomic conditions.
Investors should view XRP’s rally with cautious optimism and remember that cryptocurrency markets carry significant risk. This analysis is for educational purposes only and does not constitute investment advice.
Conclusion: What’s Next for XRP?
The conclusion of the Ripple vs. SEC lawsuit marks a watershed moment for XRP. The settlement removes years of legal uncertainty, reigniting institutional interest and sparking renewed confidence in the token’s role as a payment-focused digital asset.
In the near term, XRP’s ability to hold support above $3.35 will be critical to sustaining momentum. If successful, analysts see the potential for XRP to target $4–$5, with more ambitious projections aiming for $8–$10 in the coming months or years.
For long-term adoption, regulatory clarity could pave the way for XRP’s deeper integration into the global payments industry, aligning with Ripple’s original vision. However, investors should remain mindful of the risks associated with crypto markets, particularly volatility and regulatory changes across different jurisdictions.
See: Ripple Seeks US Bank Charter for Stablecoin Expansion
In summary, while the lawsuit’s end represents a significant milestone, XRP’s next chapter will be defined by market resilience, institutional adoption, and the broader trajectory of the digital asset ecosystem.
Always conduct independent research and consult financial professionals before making investment decisions. Cryptocurrency markets are volatile and carry substantial risks.
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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BIS Proposes Scoring Model for Crypto AML
AML | Aug 21, 2025
Image: Freepik/Sentavio
BIS Introduces AML Compliance Score Model for Crypto
On August 13 2025, the Bank for International Settlements (BIS) published a new bulletin proposing a fresh approach to anti money laundering (AML) compliance for cryptoassets. The paper suggests using the public record of blockchain transactions to generate AML compliance scores that could be applied when crypto is exchanged for fiat at off ramps.
Key Takeaways
- Traditional AML rules that rely on intermediaries are not effective for permissionless blockchains
- Blockchain transaction history can be used to assign AML compliance scores
- These scores could be checked at off ramps to prevent illicit funds from entering banks
- A scoring model could encourage a culture of duty of care across the crypto ecosystem
Why Traditional AML Approaches Fall Short for Crypto
Most AML rules today rely on regulated intermediaries like banks to perform customer checks, however that approach doesn't work well for permissionless blockchains, where records are maintained by decentralized validators instead of a single entity. Once crypto moves from an exchange to an unhosted wallet, conventional checks lose their reach. This gap is important as stablecoins have overtaken bitcoin as the main vehicle for illicit crypto transactions, accounting for an estimated 63% of criminal activity in 2024 according to both the Chainalysis 2025 crypto crime report.
How AML Compliance Scores Could Work
The BIS paper suggests using blockchain’s public history to assign compliance scores to cryptoassets. A higher score would indicate clean funds tied to verified wallets, while a lower score would suggest links to illicit addresses. Authorities could set thresholds for AML triggers, with banks, exchanges, or stablecoin issuers applying the rules at off ramps.
See: UK FCA Plans Full Crypto Licensing Regime by 2026
This scoring model could range from strict to permissive. A strict version would only allow coins from verified 'okay listed wallets'. A permissive version would block only those funds that have touched 'not okay listed addresses'. Intermediate models could combine multiple criteria, such as recent wallet history, periods of holding on allow listed addresses, or interaction with suspicious protocols.
This approach aligns with the Financial Action Task Force’s travel rule guidance for virtual assets and VASPs and complements Canada's domestic efforts by FINTRAC to strengthen monitoring of crypto transactions. By integrating compliance scores at conversion points, Canadian exchanges and banks could reduce risk while supporting innovation.
There are also implications for monetary policy and sovereignty. The BIS notes that widespread cross border use of stablecoins can undermine local regulations. Differentiating coins based on where they come from could help Canada maintain stronger controls over its financial system. In practice, clean stablecoins could trade at a premium over those with a questionable history, creating incentives for compliance.
Building a Duty of Care Culture
If compliance scores were the standard, all ecosystem participants from retail wallet holders to major exchanges would need to exercise a duty of care. That alone could spur growth of third party compliance services as the market moves to support cleaner transactions.
See: OSC Crypto Trading Platform Compliance Review Findings
Compliance scoring would increase new technical requirements for fintechs while opening the door for services and tools that help users assess risk. As Canadian and global regulators weigh next steps in crypto regulation, the BIS compliance scoring model offers an approach that combines blockchain transparency with regulatory safeguards. NCFA members can stay ahead of these changes by subscribing to the weekly NCFA newsletter for updates on compliance, policy, and fintech innovation.
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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Do Kwon Pleas Guilty as Bitcoin Nears Record High
Terra | Aug 13, 2025
Image: Freepik/Wirestock
Terraform Labs Founder Admits to Fraud While Bitcoin at Historic High, Offering Lessons for Innovators
On August 12, 2025, Terraform Labs founder Do Kwon pleaded guilty in a U.S. federal court to fraud charges connected to the $40 billion collapse of TerraUSD in 2022. The plea includes forfeiting more than $19 million and a recommended sentence of up to 12 years in prison, with official sentencing set for December 11, 2025. The development comes as Bitcoin trades near its all time high, shining a light on the incredible appeal and robustness of crypto even with major scandals lurking in the shadows.
Why TerraUSD Crumbled and Bitcoin Held Strong
The timing is ironic, if not remarkable. While one of the most infamous fraud cases in crypto history reaches its turning point, Bitcoin is showing resilience at a price near its all time high. This resilience is grounded in its transparent design and predictable monetary policy. For fintech innovators, it is a reminder that systems with verifiable trust can withstand industry turbulence and public scrutiny.
While Bitcoin is volatile it makes no promise of price stability and operates on open, verifiable code.
TerraUSD was an algorithmic stablecoin designed to maintain a $1 peg without real world asset backing. Prosecutors said Kwon misled investors by failing to disclose the intervention of an outside trading firm to restore the peg during the May 2021 depegging. The collapse revealed a complex and fragile financial system without external audits, reserve transparency, or proven crisis controls.
Integrity and Investor Protection
The Terra collapse destroyed billions in investor wealth and caused severe personal and economic consequences. The $4.5 billion civil penalty Terraform Labs agreed to in 2024 with the U.S. Securities and Exchange Commission confirms that regulators are increasingly prepared to hold firms accountable. Also Kwon still faces criminal charges in South Korea related to the collapse of TerraUSD. If he is removed from the U.S. after serving his sentence, Seoul may pursue extradition to face those charges
See: Brutal Kidnappings Target French Crypto Figures
For fintech builders, protecting investors should not be about checking off a regulatory box but rather a prerequisite for sustainable growth. Product design, public communications, and crisis response must all play a role in a culture of integrity.
Takeaway
The projects that survive and evolve into massive legacies are those that match technical innovation with foundational governance and operational integrity.
Innovation will continue to drive financial change, but trust is the asset that endures.
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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