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
Bank of England Sets New Rules for Systemic Stablecoins
Stablecoin Regulations | Nov 17, 2025
AI generated image
UK Stablecoin Consultation And What It Means
On November 10 2025, the Bank of England released a proposed regulatory regime for sterling denominated systemic stablecoins for consultation. The paper explains how large scale issuers designated as systemic would be required to back customer balances, manage reserves and operate safely within the United Kingdom financial system. These rules apply only when HM Treasury designates an issuer as systemic.
See: Europe’s Digital Euro and Bank Stablecoin Race
Smaller issuers remain active in the market under the Financial Conduct Authority rules and may transition into the systemic framework if they grow to a scale that could influence the wider financial system.
The consultation is the most detailed update to United Kingdom stablecoin policy since HM Treasury released draft cryptoasset legislation in April 2025, and establishes a clear structure for how systemic digital money could function safely in day to day payments.
Stablecoin Backing Rules And Safety Requirements
The consultation explains how systemic stablecoins must be backed and why this structure matters for safety in everyday payments. Issuers must hold at least 40% of reserves as deposits at the Bank of England. The remaining portion, up to 60%, can be invested in short term United Kingdom government securities. This mix offers strong protection and keeps the reserve simple and transparent.
The Bank of England also outlines a transition period for new issuers. In the early stages, they may place up to 95% of backing assets in government debt before moving toward the long term structure. This step is meant to support early growth while maintaining a high level of safety.
See: Shopify, Coinbase, Stripe to Take USDC Payments Mainstream
All backing assets must sit in a statutory trust that always matches the value of coins in circulation. This requirement protects customer funds and reduces the risk of shortfalls during periods of stress. It also creates a clear line between the issuer’s own balance sheet and the assets that support the stablecoin.
Custody Rules And Safeguards For Stablecoin Reserves
The proposed regime introduces requirements for how backing assets are held and protected. The consultation sets out the expectation that backing assets sit in a segregated trust structure with protections similar to client asset rules. This mix of central bank deposits and short term government securities is intended to provide strong protection for customer funds while allowing issuers to generate modest returns needed to support operations.
Institutions holding backing assets would also need to meet operational resilience standards and demonstrate they can respond to stress conditions without interruption to customer redemptions.
Prudential Oversight For Systemic Issuers
Systemic stablecoin issuers would operate under prudential requirements similar to other payment system operators. The consultation notes that the Bank of England would supervise major issuers to ensure continuing safety, strong risk controls and effective recovery planning.
See: BIS Proposes Scoring Model for Crypto AML
The focus is on preventing operational failure in a systemically important payment instrument. The combination of required reserve composition and Bank of England supervision is designed to manage the risks associated with large scale issuance of digital money in everyday payments.
How Stablecoins Will Connect Into UK Payment Systems
Issuers that reach systemic scale would be supervised in the same framework applied to other major payment firms. The regime outlines how stablecoins can connect to payment rails in the United Kingdom while meeting resilience expectations. The Bank of England highlights the importance of maintaining continuity of payments even during stress events, which is a central consideration in the proposed framework.
How To Respond To The Consultation
The Bank of England is accepting written submissions on the consultation. Responses can be provided directly through the consultation portal hosted by the Bank of England.
Why It Matters
The consultation is a major advancement toward integrating large scale stablecoins into the formal financial system. It provides clear expectations for how issuers can operate safely with trusted backing, operational resilience and strong central bank supervision while supporting innovation in payments.
See: Global Payments to Reach $2.4 Trillion and Tokenized Future
Canada continues to develop its own approach to digital assets and stablecoin oversight. The Retail Payment Activities Act is already in effect and sets expectations for payment service providers. Budget 2025 confirmed that federal authorities are developing a national framework for stablecoins and the Bank of Canada will administer it with publication expected in 2026. As other jurisdictions advance their own frameworks, coordinated and transparent regulation will remain important for financial stability and consumer protection.
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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J.P. Morgan Launches First Public USD Deposit Token
Digital Money | Nov 12, 2025
Image: Freepik/Pikisuperstar
J.P. Morgan Becomes First Bank to Issue a Deposit Token on a Public Blockchain
On November 12, 2025, J.P. Morgan announced that it had become the first major bank to issue a USD deposit token on a public blockchain. The new JPM Coin (ticker JPMD) allows institutional clients to send and receive funds instantly using Base, the Ethereum Layer 2 network developed by Coinbase.
The project follows successful testing in June of this year with B2C2, Coinbase, and Mastercard, which achieved real-time issuance and redemption of the token. The initiative is led by Kinexys by J.P. Morgan, the bank’s blockchain division that has built digital financial infrastructure since 2015.
Why J.P. Morgan is Leading This Transformation
J.P. Morgan’s motivation goes beyond efficiency. By placing regulated deposits directly on a public chain, the bank is positioning itself for the next era of interoperable digital finance. Its clients can now settle cross-border trades, treasury flows, and digital asset transactions onchain, with the reliability and security of a regulated deposit. This model combines bank-grade security with blockchain’s speed and transparency.
See: Bank-Issued Deposit Tokens Emerge and JP Morgan Sees Them Going DeFi
Rather than competing with stablecoins, J.P. Morgan is building a framework where traditional deposits become programmable financial instruments, integrated with smart contracts.
The launch shows how large banks are implementing strategies for digital money. For global institutions, it reduces the friction of moving funds across time zones and platforms, offering constant access to liquidity and settlement.
By offering instant, always-on settlement and programmable deposits backed by a regulated bank, J.P. Morgan is setting a new standardfor how traditional finance can participate safely in the digital asset economy while maintaining oversight and trust.
Lessons for Canada’s Regulators
For Canada, J.P. Morgan’s approach provides a clear case study as the Office of the Superintendent of Financial Institutions (OSFI) and the Bank of Canada (BoC) advance their own stablecoin policy framework. If Canada adopts similar standards for CAD-denominated deposit tokens, it could enable cheaper, faster settlements while maintaining full regulatory oversight.
See: VersaBank USA Launches Tokenized Deposits Pilot
There's also an opportunity for Canadian fintechs to collaborate with banks on compliant blockchain payment rails. Domestic players like Interac and major banks may soon face competitive pressure if global stablecoin transactions become a new standard. This type of regulatory model would allow Canadian financial institutions to issue tokenized deposits that preserve trust while keeping innovation local.
How Deposit Tokens Could Impact Payment Payment Economics
Once Canadian regulators establish clarity around digital deposits, the cost of settlement could fall dramatically. Current payment systems such as e-Interac and card networks, rely on intermediaries that add delay and cost. Regulated tokens could settle value directly between wallets within seconds, removing several layers of friction.
While this could reduce traditional fee income, it also supports innovation and opens new business models.
See: Corporate Crypto Treasuries Cross $137B as DATCos Multiply
Banks could earn from providing liquidity, token custody, or smart contract services. Fintechs could integrate programmable money into real-time lending, payroll, or cross-border commerce.
If Canada aligns with international standards, the combination of stable onchain settlement and regulatory assurance could strengthen national competitiveness and attract global capital.
Outlook
J.P. Morgan’s entry into public blockchain payments proves that regulated institutions can safely participate in decentralized finance while meeting compliance standards. The ability to move regulated value instantly across borders could help Canadian firms compete globally, expand access to capital, and reinforce confidence in digital finance.
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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Budget 2025 Accelerates Fintech, AI, and Capital Growth
Federal Budget 2025 | Nov 5, 2025
Image courtesy of AI
Canada’s 2025 Budget Funds Open Banking, AI Infrastructure, and Venture Capital to Drive National Competitiveness
On November 4, 2025, the Government of Canada tabled Budget 2025, announcing targeted investments in several fintech and related sectors of interest including open banking, digital assets, artificial intelligence, and venture capital to strengthen national competitiveness and expand innovation.
NCFA welcomes these measures that taken together, form a coordinated strategy to modernize Canada’s financial system and accelerate technology adoption across sectors. While there are many parts to the 493 page PDF document designed to modernize government, stimulate investment and support key sectors of the economy (especially those being adversely impacted by the weight of Washington's tariff policy), this article focuses on 6 select areas of the budget.
1. Consumer-Driven Banking (Open Banking)
Budget 2025 confirms that Canada will move forward with the Consumer-Driven Banking Act to establish a national open banking framework. Oversight will rest with the Bank of Canada, which receives $19.3 million over two years to build and supervise the system. The $36.9 million previously allocated to the Financial Consumer Agency of Canada (FCAC) will be reprofiled to align with this transition. To support cybersecurity and national security functions, $25.7 million over five years and $5 million ongoing are provided to CSIS and the RCMP.
The government also commits that Canadians will not be subject to fees when accessing and sharing their financial data under the new regime. This right will be included in federal privacy legislation to protect consumers from banks charging for data portability.
Timeline:
- 2025: Legislation and technical standards established
- 2026: The Real Time Rail becomes operational and widely used
- 2027: Open banking with full consumer functionality, including payment initiation, is expected by mid-2027
See: Canada’s Payments Innovation Push Gains Speed
The data access fee ban effectively aligns Canada with the UK and Australia, where accredited fintechs can access user-permitted financial data without paying incumbent banks, creating a more level playing field for startups.
Firms should focus on accreditation, API readiness, and user consent ecosystems now, while anticipating the full rollout with data portability and write-access functionality expected in 2027. The Bank of Canada’s new role brings institutional authority to open banking, aligning Canada’s model with prudential oversight practices seen in advanced financial systems.
2. Stablecoins and Digital Payments
Budget 2025 introduces a federal framework for fiat-backed stablecoins to protect consumers and ensure financial stability. Issuers must maintain adequate reserves, provide redemption rights, and follow strict disclosure and audit rules. The Bank of Canada will oversee compliance and receive $10 million over two years starting in 2026–27, with ongoing costs of about $5 million annually recovered from issuers. The Retail Payment Activities Act will be amended to extend oversight to payment service providers dealing in prescribed stablecoins.
See: Quantum Safe Stablecoins Meet Real Time Finance Needs
This is Canada's first major step towards integrating digital assets within regulated finance. Fintechs and payment firms can soon align product design with national standards for reserve management and risk controls. The framework signals Canada’s preference for stablecoins backed by traditional assets and issued under domestic supervision, distinguishing it from more permissive global approaches.
3. Financial Integrity and Compliance Technology
Budget 2025 strengthens financial system integrity by modernizing the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Personal Information Protection and Electronic Documents Act. The updates ban cash transactions over $10,000, prohibit third-party cash deposits, and authorize real-time information sharing through the new Integrated Money Laundering Intelligence Partnership. FINTRAC is added to the Financial Institutions Supervisory Committee, expanding coordination with the Bank of Canada, OSFI, and the Department of Finance.
This overhaul moves compliance toward continuous data exchange rather than static reporting. For regtech and fintech firms, it expands the market for monitoring, analytics, and automation tools. By embedding FINTRAC directly within the supervisory structure, the government is creating a multi-agency model similar to the UK’s Joint Money Laundering Intelligence Taskforce. These measures are foundational to supporting open banking and payments modernization safely.
4. Innovation and AI Competitiveness
Budget 2025 commits $925.6 million over five years starting in 2025–26 to build sovereign public AI infrastructure, including a Canadian sovereign cloud for compute capacity. Of this, $800 million comes from reallocated funds. The new Minister of Artificial Intelligence and Digital Innovation will coordinate partnerships with industry and direct investments through the Canada Infrastructure Bank. Statistics Canada receives $25 million over six years and $4.5 million ongoing for AI and digital measurement programs.
See: Regulating for Growth by Understanding Innovation
The budget also reforms the Scientific Research and Experimental Development (SR&ED) tax incentive. The annual enhanced credit limit rises from $4.5 million to $6 million, and companies can elect pre-claim approval for faster reimbursements, reducing average processing from 180 days to 90 days by April 2026.
This is the largest coordinated investment in Canada’s digital productivity to date. Sovereign compute and AI infrastructure will help domestic firms train and deploy large models while maintaining data residency. The SR&ED reform improves liquidity during tight capital cycles for startups, software developers, and AI ventures by accelerating access to refundable credits. These changes directly respond to longstanding calls from the innovation community for faster turnaround and broader eligibility for digital R&D.
5. Venture Capital and Early-Stage Finance
To expand the growth capital ecosystem, Budget 2025 allocates $1 billion over three years starting in 2026–27 to the Business Development Bank of Canada (BDC) for the Venture and Growth Capital Catalyst Initiative. This fund will leverage pension and institutional investment to scale up Canadian venture capital and support new, diverse fund managers. Additional measures include:
- $84.4 million over four years ElevateIP
- $22.5 million over three years Innovation Asset Collective’s Patent Collective
- $75 million over three years for the National Research Council’s Industrial Research Assistance Program
These measures help close gaps between early-stage funding and commercialization. The Catalyst Initiative could attract more private capital into growth-stage companies, while IP and R&D supports strengthen Canada’s intangible economy. For fintechs, this capital mobilization aligns with efforts to improve scaling conditions, enabling firms to move beyond domestic pilots into global markets. By expanding the Canada Growth Fund Venture Program and the Venture Capital Catalyst Initiative, Ottawa is trying to fill the scale-up gap where private funding has been slow to follow through.
6. Consumer Banking Fees and Access Reforms
Budget 2025 targets long-standing consumer frustrations with high fees, slow transfers, and limited access to funds. The government will review ATM and Interac e-Transfer fees charged by federally regulated institutions and will report on corrective actions in 2026.
By spring 2026, the government will also ban investment and registered account transfer fees, which average $150 per account, and mandate faster, transparent transfers. Fintechs such as Wealthsimple and Questrade have supported these measures for years, arguing they will remove switching barriers and increase competition.
Consumer access to deposited funds will also improve. The Bank Act will be amended to raise immediate access for cheque deposits from $100 to $150, close the gap between in-person and digital deposits, and shorten cheque-hold times by raising the threshold for early release from $1,500 upward.
See: BoC’s Carolyn Rogers Calls Banks an Oligopoly
To strengthen competition, the public-holding threshold for smaller banks and credit unions will double from $2 billion to $4 billion, supported by a new voluntary code of conduct on brokered deposit access and fair distribution.
These reforms respond directly to public frustration with high account transfer costs, after firms like Wealthsimple and Questrade called for faster, cheaper asset portability. Lower fees, faster access to money, and easier account switching will force incumbents to compete on value. Fintech companies gain room to build better portability and payments solutions within a simpler and more open regulatory landscape.
Closing Thought
Budget 2025 delivers the clearest roadmap for a more competitive financial services sector and digital economy. Open banking, AI, and venture capital measures finally intersect within a national policy framework designed to increase innovation and resilience. The obvious challenge now is delivery and execution. Timelines must hold, interoperability standards must stay open, and public-private coordination must translate funding into outcomes. Canada has a window to jump-start competitiveness by executing on what has already been announced rather than starting new consultations. The need is there. The foundation is set. It's now time to build and execute Canada.
Subscribe to NCFA Canada’s weekly newsletter for news, analysis and updates on fintech innovation, policy, and funding.
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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Standard Chartered CEO Backs Tokenized Finance in Hong Kong
Tokenization | Nov 3, 2025
Image: Freepik/lifeforstock
Standard Chartered CEO Backs Tokenized Finance In Hong Kong
On November 3, 2025, speaking at Hong Kong FinTech Week 2025 (Nov 3-7), Standard Chartered Group CEO Bill Winters told attendees that the bank is working with regulators and infrastructure providers across Asia to make tokenized settlements operational.
“Our belief, which I think is shared by the leadership of Hong Kong, is that pretty much all transactions will settle on blockchains eventually, and that all money will be digital,” adding that institutional adoption is now driving the market.
See: Crypto Finance Finding Scale and Clarity in 2025
Digital currency momentum is building across Asia. According to Quartr, during Standard Chartered’s Q3 2025 earnings call, he emphasized that blockchain and tokenized asset infrastructure are “a core part of our payments and securities business strategy.” The bank’s venture arm SC Ventures has invested in settlement platforms and digital asset custody providers in Hong Kong, Singapore, and the UAE to prepare for institutional scale.
Tokenization Becomes Core Financial Infrastructure
Hong Kong’s digital finance policy is moving from experimentation to scale. The Securities and Futures Commission (SFC) circular on expanding virtual asset trading platform services removes earlier barriers for banks and licensed exchanges to issue and custody tokenized securities under supervision. It also aligns with Hong Kong’s new stablecoin licensing regime, which took effect on August 1 2025, creating a pathway for licensed entities to offer regulated stablecoins towards broader public access.
Hong Kong Monetary Authority chief executive Eddie Yue unveiled the city’s Fintech 2030 strategy built on four pillars. Data, AI, Resilience, and Tokenization (DART) and announced the next phase of the Project Ensemble pilot (read his full speech here).
The pilot now extends beyond proof-of-concept to real transactions in tokenized deposits and money-market funds between major banks and corporates. Yue said tokenization will make bond settlement and trade finance “faster, cheaper, and safer” while preparing the city for cross-border interoperability.
Implications for Canada
Hong Kong’s strategic approach shows how regulatory clarity and infrastructure readiness can draw investment and accelerate industry innovation. The model offers a blueprint for Canada to move beyond regulatory sandboxes and innovation hubs toward supervised tokenized settlement and digital-asset custody frameworks built into the financial system.
See: NCFA Canada and TheBlock Partner to Build a Global Bridge for Tokenization
For Canadian fintechs and banks, staying competitive will depend on how quickly policymakers complete payment modernization, establish clear rules for stablecoins and tokenized assets, and open Payments Canada’s systems to more participants through the Real-Time Rail.
Remember, Standard Chartered is already building tokenized-finance capabilities across Asia. Institutions will need to update their core systems to benefit from faster cross-border and digital settlement and to connect with the growing global networks for tokenized finance.
Outlook
The SFC and HKMA frameworks create one of the world’s most coordinated environments for institutional blockchain adoption and banks like Standard Chartered are positioning themselves to capitalize on that alignment.
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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Get a Crypto License in Estonia – full legal setup and MiCA-ready strategy
Oct 30, 2025
Estonia has become one of the most attractive EU hubs for crypto businesses: digital-first processes, e-Residency, and clear MiCA-aligned rules make it ideal for launching compliant exchanges, wallets and custody services.
Thanks to this, obtaining a crypto license in Estonia is profitable, fast, and legal.
Prifinance leverages this environment to deliver end-to-end support - from company formation and AML/KYC frameworks to regulatory communication and post-authorization compliance.
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Advantages of working with Prifinance |
Numbers |
| Experience in international consulting | 30 years |
| Completed projects | 10,000+ |
| Crypto licenses obtained | 400+ |
| Supported jurisdictions | 40 |
| Successful cases on complex requirements (including MiCA) | 100+ |
| Lawyers, auditors, and consultants | 100+ |
This track record ensures brand reliability and practical experience when you scale in Europe.
Why an Estonian crypto license matters
A MiCA-compliant Estonian license (CASP/VASP) gives lawful access to the EU market with passporting rights, clear consumer protections, and harmonised reporting requirements. You need this license when your project: accepts fiat/crypto from users, offers custody or wallet services, executes crypto-to-fiat or crypto-to-crypto trades, processes remittances, or markets token sales to EU residents.
See: Quebec Decision Challenges Canada’s Crypto Rules
Beyond legal permission, the license demonstrates institutional-grade governance - strict KYC, continuous transaction monitoring, secure IT architecture, and appointed compliance officers - which improves access to banking, liquidity partners and institutional clients. These elements are crucial at launch and become non-negotiable as trading volumes, AML scrutiny, or institutional relationships grow.
Why Estonia - practical benefits
- Digital processes & e-Residency: remote company setup and digital reporting reduce time and travel.
- Speed & predictability: streamlined applications and a generally faster review timeline help time-to-market.
- Tax advantages: 0% corporate tax on retained earnings supports reinvestment and growth.
- Regulatory credibility: public VASP registers and strict AML standards enhance trust with banks, partners, and clients. These jurisdictional advantages combine to make Estonia particularly attractive for remote-first teams and cross-border service providers.
What Prifinance does for you
We prioritise your brand and market credibility from day one. That means not only preparing an application that satisfies regulators, but also shaping how counterparties and clients perceive you: professional legal structure, transparent ownership, robust compliance policies, auditor-ready documentation, and clear public-facing materials.
Our offering includes: company incorporation in Estonia, preparation of AML/KYC and internal control manuals, recruitment and registration of key personnel, technical security checklists, liaising with the FIU/FSA, and post-license support. By pairing compliance with marketable governance, we help your brand convert regulatory compliance into a competitive asset.
Proof points & partners
Prifinance works with major banking and fintech partners and maintains long-term relationships with thousands of international clients.
Our partners include leading financial and technology companies such as CIM Banque, Commerzbank, Payoneer, OCBC Bank, Binance, Mashreq, Odav Print, Montify, and Blockchain Life.
Our client feedback and case experience show smooth licensing processes and effective post-license support - a practical advantage when regulators request clarifications or audits.
Visit https://prifinance.com/en/cryptocurrency-license/ to request a tailored licensing plan, get a cost estimate, and start the application process: Prifinance provides full-cycle support for Estonia CASP/VASP applications and post-authorization compliance. Send a request through our site to receive a personalized proposal.
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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Regulatory Fairness Returns as SEC and CFTC Realign
Regulation | Oct 27, 2025
Image courtesy of AI
SEC to Reform the Wells Process as Trump Taps Michael Selig to Lead the CFTC
On October 7, 2025, SEC Chair Paul Atkins talked about major changes to the Wells process in an SEC keynote address to the A A Sommer Jr Lecture at Fordham School of Law, including a new enforcement framework built around due process and transparency. Atkins described the Wells process as a safeguard that prevents the Commission from becoming “policeman, prosecutor, judge, and jury all in one.” He also emphasized that enforcement should focus on actual misconduct and investor harm rather than minor or technical violations.
The reforms include doubling the time allowed for responses, expanding access to testimony and investigative materials, and offering meetings with senior enforcement leadership before a recommendation is made. A BakerHostetler analysis and Dechert commentary confirm that these measures address years of criticism that the process was opaque, one-sided and unfair.
See: SEC Clears Path for Fast Track Crypto ETFs
By aligning the Wells process with constitutional principles of fairness and proportionality, the SEC is signaling a more predictable approach that could encourage compliance and reduce costly disputes.
From Crackdown to Clarity in Crypto
Few sectors highlight the importance of fair process more than digital assets. In 2024 and 2025, the SEC issued several Wells notices that dominated headlines and influenced global sentiment toward crypto markets (aka regulatory crackdown). NCFA covered how these actions impacted both perception and investment, such as the various Wells notices received that preceded litigation to Coinbase (March 2023), Robinhood (May 2024), and Uniswap Labs (April 2024), each becaming examples of what critics called “regulation by enforcement.”
The market reaction was usually immediate and swift. Share prices fell sharply after each announcement, venture funding slowed, and token listings became more conservative. The consistent theme across these cases was the lack of procedural clarity, leaving firms to interpret opaque standards that often changed after the fact. Not all inquiries ended with penalties. The SEC’s decision to close its stablecoin investigation in the Paxos BUSD (July 2024), suggested that avoiding enforcement was possible in limited cases.
See: U.S. Maps Out Plan to Lead World in Crypto
Atkins planned changes come amid an administration that has declared support for digital assets and innovation and issued a series of policy reversals and case dismissals since taking office, including a full unconditional pardon for Binance founder, CZ most recently. The new government enacted the country's first comprehensive stablecoin law, the GENIUS Act, forming a statutory foundation for reserve-backed tokens. In February 2025, U.S. crypto czar Sacks outlined a coordinated plan for risk based supervision and technology neutral rules. Together these measures announced by the SEC signal a coordinated push by the administration toward fairness, predictability and genuine regulatory clarity.
A New Direction at the CFTC
Two weeks after Atkins’ address, as reported by Politico, the Trump administration announced plans to nominate Michael Selig as chair of the Commodity Futures Trading Commission who brings experience in digital asset policy and his focus on aligning derivatives oversight with technological modernization.
If confirmed, Selig’s appointment could enhance coordination between the CFTC and SEC on digital assets and tokenized products. A combined regulatory environment based on fairness, due process, and interagency cooperation that could stabilize U.S. market confidence after years of policy divergence and frustrated investors and innovators.
Why It Matters
Regulatory predictability is essential for innovation and investment. When enforcement processes are clear and timelines are known, firms can allocate resources more effectively between compliance and product development (and not moving goal posts).
The Wells process reforms and the CFTC nomination together are clear signs that the days of regulating crypto by fear and enforcement are over. If implemented as anticipated, these policies could restore the trust between market participants and regulators, a prerequisite for sustainable capital formation. Impacted fintech leader should update internal playbooks to reflect the new Wells response timeline, including the opportunity for earlier meetings and white paper submissions.
See: CSA Reminds Crypto-backed Lenders of Securities Law Duties
Boards can establish governance protocols based on four week response periods and expect data-driven engagement with enforcement staff. For investors, a fairer U.S. digital asset environment could deepen capital pipelines and improve valuations in the digital finance sector.
For continued updates on regulatory developments and their implications for fintech and digital markets, subscribe to NCFA’s weekly newsletter for verified analysis and insights.
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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Canada Issues Record Penalty to Crypto Exchange Cryptomus
Compliance Enforcement | Oct 24, 2025
Image: Freepik/Rawpixel.com
FINTRAC’s Historic $177 million Fine Against Cryptomus
On October 16 2025, Reuters reported that the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposed a penalty of C$176,960,190 on Xeltox Enterprises Ltd., which operates as Cryptomus (formerly Certa Payments Ltd), for serious failures to file required reports under Canada’s anti-money-laundering regime. The decision was announced publicly on October 22 2025 after a compliance examination under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. FINTRAC described it as the largest penalty in its history.
FINTRAC's Compliance Review Findings
FINTRAC found that Cryptomus failed to submit suspicious transaction reports on 1,068 separate occasions during July 2024 when there were reasonable grounds to suspect links to money laundering or terrorist activity financing. It also failed to comply with a Ministerial Directive, did not maintain or update written compliance policies approved by a senior officer, and failed to assess and document the risk of money-laundering offences within its operations.
See: BIS Proposes Scoring Model for Crypto AML
The examination also revealed that Cryptomus did not file a notification of changes to its registration information and failed to report 1,518 large virtual-currency transactions above $10,000 in July 2024. These breaches were linked to laundering proceeds from crimes including child sexual abuse material, fraud, ransomware payments, and sanctions evasion. Cryptomus had already been barred by the British Columbia Securities Commission from securities trading earlier in 2025.
Sarah Paquet, Director and Chief Executive Officer, FINTRAC:
“We are committed to working with our domestic partners and international allies to protect the safety of Canadians and the security of Canada’s economy. Given that numerous violations in this case were connected to trafficking in child sexual abuse material, fraud, ransomware payments and sanctions evasion, FINTRAC was compelled to take this unprecedented enforcement action.”
Sign of Stronger Enforcement Approach
FINTRAC confirmed that in 2024–25 it issued 23 Notices of Violation of non-compliance, the largest number in a single year since it received legislative authority to levy penalties in 2008. Those penalties totalled more than $25 million before the Cryptomus case. With enforcement ramping up, it appears the agency’s oversight is widening to include both traditional financial institutions and virtual asset service providers.
As FINTRAC noted in its statement, the rapid expansion of Canada’s virtual-currency sector also brings higher risks of money laundering, terrorist financing, and sanctions evasion. The agency said strong compliance frameworks are essential to protect Canadians and safeguard the financial system.
See: CSA Reminds Crypto-backed Lenders of Securities Law Duties
While the fine demonstrates that Canada can act decisively after a compliance failure, it also raises questions about how proactive oversight can become. FINTRAC’s review was retrospective, relying on an examination of past activity. With digital asset volumes growing and transactions moving across borders instantly, regulators need stronger real-time tools, data sharing systems, and cooperation between provincial, federal, and global agencies.
Outlook
Effective supervision must keep pace with the speed and anonymity of crypto markets without discouraging legitimate fintech innovation. For the Canadian fintech community, understand that compliance is vital for sustained growth and is a competitive necessity. Firms that verify client identities, maintain risk assessments, and document transactions can not only avoid enforcement but also build trust with users and partners.
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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