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
UK Publishes Draft Rules for Crypto Regulation
Regulation | May 5, 2025
Image: Freepik/fabrikasimf
UK Finalizes Draft Crypto Legislation as Sector Faces Regulation
On April 29, 2025 during UK Fintech Week, the UK government published draft rules to bring cryptoasset firms under its financial services regulatory framework. The rules have been in the works for many years with the goal to protect consumers and stop fraud while giving fintech firms clear rules to innovate. If adopted, the new rules would apply to crypto companies based in the UK and also overseas if they serve UK customers including crypto trading, custody, brokering and marketing related firms operating in the sector. Read the 'Future financial services regulatory regime policy note (accessible)'.
The draft version is being published for technical feedback only (not policy direction) with stakeholder comments due by May 23, 2025. Rules around market abuse and token listings are not yet included, and will be published later.
See: UK FCA Plans Full Crypto Licensing Regime by 2026
The UK's crypto legislation follows years of planning. In 2018, the UK created the Cryptoassets Taskforce to better understand how crypto fits into financial markets. By 2022, the government committed to becoming a global crypto hub. In 2023, it launched a consultation to bring crypto into the Financial Services and Markets Act.
Regulatory Scope
The Regulated Activities Order (RAO) is being expanded to cover crypto, and will replace the lighter anti-money laundering registration model currently in place.
- Crypto exchanges, custodians, dealer-brokers, and cryptoasset lending platforms must register with the Financial Conduct Authority (FCA)
- Firms serving UK customers must meet UK standards, even if based abroad
- Covered activities include trading, marketing, safekeeping, brokering, dealing, lending, staking, and stablecoin issuance
- Firms will need to meet new requirements on transparency, complaints handling, and operational resilience
- The FCA plans to ban retail investors from using borrowed funds to purchase crypto
The draft legislation doesn't include separate rules for decentralized finance (DeFi) but it makes clear that authorization is still required if a person or entity is in fact effectively controlling or operating a regulated activity, such as governance, interfaces, and service providers connected to decentralized trading platforms, staking, custody, or stablecoin models.
See: UK’s Regulatory Crypto Roadmap from Sandbox to Mainstream
Interestingly, if a DeFi protocol is truly autonomous and doesn't have an identifiable party conducting business activity, it may fall outside the scope. However in reality, most DeFi projects today that offer user interfaces, save admin keys, touch fees or tokens could be subject to UK regulation.
How the UK and Canada Compare on Crypto Regulation
In the UK, cryptoassets will be regulated under the same legal framework used for mainstream financial services. The new rules bring crypto into the Financial Services and Markets Act 2000 (FSMA), which currently oversees banking, securities, and insurance. Crypto firms must be authorized by the FCA and meet detailed standards for conduct, custody, and consumer protection.
In Canada, regulation falls under securities law. The Canadian Securities Administrators (CSA) and provincial regulators such as the Ontario Securities Commission (OSC) treat many crypto tokens as securities or derivatives. Platforms are expected to register as dealers or marketplaces, but there isn't a separate regime for stablecoin issuers or crypto payments.
The UK has introduced a dedicated framework for qualifying stablecoins. While Canada does not have a separate regime for stablecoin issuers, they refer to them as value-referenced crypto assets (VRCAs) and certain trading conditions apply for registered platforms only.
The FCA is planing to ban retail from purchasing cryptocurrencies using borrowed funds. Canada has not gone that far but Canadian platforms must conduct suitability and risk assessments.
Both countries operate sandboxes. The UK launched a Digital Securities Sandbox (DSS) on Sep 30, 2024, see joint policy statement by the Bank of England at the FCA. DSS allows firms to test new financial market technologies, such as distributed ledger technology (DLT) in a real world environment under a temporarily modified legal and regulatory framework to support innovation.
The UK and US are exploring closer cooperation on digital assets, including a potential joint transatlantic sandbox for digital securities. The initiative was discussed by Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent, and will be taken advanced through the UK–US Financial Regulatory Working Group with the goal of supporting responsible innovation across both markets.
See: UK vs. Canada: A Tale of Two Different Crypto Consumers
Canada has had a regulatory sandbox since 2017, which helped firms like Wealthsimple Digital Assets gain conditional approval. However Canada’s sandbox is domestically focused on exemptions, while the UK is pushing for global coordination.
The differences between the UK's approach and Canada's is structural. The UK is building crypto into its core financial regulation while Canada continues to fit crypto into its existing securities regime.
Why This Matters
UK rules will influence global standards. For Canadian firms with UK clients, the operating requirements and costs are about to get a lot more challenging and rise. The UK's approach also puts pressure on all global regulators including Canada to clarify and modernize their own crypto frameworks. The final version of the UK's crypto rules is expected later this year. The UK also said they would release a Financial Services Growth Strategy on 15 July 2025 to outline its long term financial technology priorities.
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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Takeaways from the SEC’s Crypto Custody Roundtable
Regulation | April 29, 2025
Image: Freepik/brgfx
Crypto Leaders Discuss Challenges of Digital Asset Custody
On April 25, 2025, the U.S. Securities and Exchange Commission (SEC) hosted a crypto roundtable discussion together with select industry experts and legal participants, "Know Your Custodian: Key Considerations for Crypto Custody" at the SEC's headquarters in Washington, D.C.
SEC's Opening Remarks
The opening session included remarks from Crypto Task Force Chief of Staff Richard Gabbert and SEC Chair Paul Atkins, followed by Commissioners Hester Peirce, Caroline Crenshaw, and Mark Uyeda.
See: SEC Issues Covered Stablecoin Statement, Risks Remain
Chairman Paul Atkins emphasized the importance of finally fixing long standing regulatory problems for digital assets and blockchain technology. He thanked Commissioner Hester Peirce for her leadership and described her as the right person to push forward a 'common sense' approach to crypto markets. Atkins made it clear that he wants the agency to end the uncertainty that has stifled innovation in the sector for years. He essentially confirmed what industry has been saying for years. That is that entrepreneurs across the country are building better, safer, and cheaper financial services using blockchain tech but regulatory confusion has held them back. He committed to working with Congress and the Trump Administration to set up a fit for purpose regulatory framework for crypto assets. Read his remarks here.
Commissioner Hester Peirce compared the current U.S. regulatory approach of crypto custody to a children’s game called “the floor is lava” except that regulators are making it much harder by leaving the room dark and not providing clear guidance. She said today’s rules make it very difficult for brokers, investment advisers, and investment funds to engage with crypto assets safely or legally. The SEC should make the rules clearer and recognize that not all crypto assets are the same, and in some cases using blockchain technology could even make custody safer than traditional systems. She also stressed that investors should be allowed to self-custody their assets without having to go through intermediaries like banks or broker-dealers, warning that the rules should not force unnecessary middlemen onto investors who prefer to manage their own assets securely. Regulation should encourage safer crypto markets without crushing innovation or forcing outdated models onto new technology.
Commissioner Caroline Crenshaw said that the lack of robust custody standards for crypto assets is a serious gap, and that the current environment is a risk for both retail and institutional investors. She mentioned the collapse of FTX and mismanagement in several crypto lending firms as examples of what can go wrong without the appropriate oversight, and questioned whether existing broker-dealer and advisory regimes were sufficient. Crenshaw said that any framework for custody must be technologically sound and legally enforceable to avoid paper compliance without real safeguards.
See: SEC’s First Crypto Roundtable Reveals Friction, Few Answers
Commissioner Mark Uyeda stressed that regulatory requirements must be clear or they'll drive companies offshore and that innovation was important. Cautioned against applying a single rule in a digital asset sector where one size doesn't fit all and could stifle experimentation. He asked whether digital custodians should be assessed like their traditional counterparts, if they meet the equivalent operational and risk controls.
5 Key Areas of Discussion
While the roundtable had two different focused panel discussions, here are five key challenges that were discussed when trying to apply traditional custody regulations to crypto assets.
1. Can existing securities laws accommodate crypto custody?
- Commissioner Peirce said regulation must evolve with the technology. “We must not conflate innovation with noncompliance.”
- Uyeda questioned whether the existing framework is flexible enough to accommodate “truly novel asset classes.”
- Justin Browder of Simpson Thacher noted: “There is a need for the SEC to either tailor the safeguarding rule to account for tokenized assets or recognize an evolving standard of control in the digital context.”
Takeaway: Some consensus that federal securities laws need to be modernized to support custody models for crypto assets, and compliant innovation.
2. Risks of custodying crypto versus traditional securities
- Rachel Anderika of Anchorage Digital Bank explained that “custody of bearer assets like crypto requires entirely different risk controls than custody of registered securities.”
- Adam Levitin of Georgetown Law said digital assets create “a mismatch between traditional custodial concepts and decentralized ownership structures.”
- Commissioner Crenshaw added that commingling functions in crypto markets introduces unacceptable risk.
See: UK FCA Plans Full Crypto Licensing Regime by 2026
Takeaway: The SEC must recognize that crypto custody involves new forms of risk that current frameworks do not address (nor were they designed to).
3. Impact of SAB 121 on crypto custody
- The SEC’s Staff Accounting Bulletin No. 121 was repeatedly raised as a barrier to secure custody practices. SAB 121 requires crypto custodians to report customer assets as liabilities, which discourages institutional participation. Note, the SEC already rescinded SAB 121 earlier this year, replaced by SAB 122 but industry participants are still dealing with the aftermath, such as how to rework financials for the new SAB 122 guidance.
- Jason Allegrante of Fireblocks stated: “The current path for broker dealer custody is economically unviable for most providers due to capital treatment, operational restrictions, and indefinite timelines.”
Takeaway: SAB 121 may have made it harder for trusted firms to offer crypto custody, which could reduce investor protection.
4. Limitations of broker dealer structures
- Many speakers argued that special purpose broker dealers (SPBDs) are not scaling effectively due to narrow guidance and rigid requirements.
- Veronica McGregor of Exodus said self custody wallets “complicate one size fits all assumptions,”
- Kraken’s Mark Greenberg warned that “legacy rules built for equities do not address the technological neutrality required for crypto infrastructure.”
See: OCC Opens Doors for U.S. Banks to Engage in Crypto
Takeaway: Broker dealer models need updated guidance to allow more participation in digital asset custody while still protecting investors.
5. Bankruptcy remoteness and client protection
- Several experts highlighted the issue of bankruptcy remoteness or the ability to protect customer crypto assets if a custodian fails. It's even a bigger risk when firms use pooled wallets and rehypothecation (or reuse assets for its own purposes like collateral for borrowing).
- Charles Mooney of Penn Carey Law and Larry Florio of 1kx both emphasized that regulatory clarity on ownership and segregation is essential.
- Ryan Louvar of WisdomTree said, “We need consistent expectations across custodians, advisers, and technology providers, or we risk regulatory arbitrage and fragmentation.”
Takeaway: Custodial frameworks must guarantee client protections to the equivalent of traditional systems (expectations) to support long term growth.
Upcoming Roundtables
- May 12, 2025: Tokenization: Where TradFi and DeFi meet
- June 6, 2025: DeFi and the American spirit
Regulatory Outlook
The SEC roundtable series is a clear sign that key SEC regulators are open to revisiting current rules. As more investors and institutions enter crypto markets, the need for clear rules on how to safely hold these assets is becoming urgent.
See: DOGE Goes After SEC Offers $50K Buyout to Resign
The collaboration and engagement with industry should move the U.S. closer to having a practical crypto framework that supports both innovation and safety.
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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ProShares XRP Futures ETFs Set to Launch April 30
Crypto | April 28, 2025
Image: Freepik/DC Studio
ProShares Wins SEC Approval for XRP Futures ETFs, Opening Doors For New Investors
As reported by Coindesk, the U.S. Securities and Exchange Commission (SEC) has officially approved three XRP futures exchange-traded funds (ETFs) from ProShares, with trading scheduled to begin on April 30, 2025. This is another major milestone for XRP and crypto, even though the approval is for futures contracts and not direct XRP ownership. This means that investors can trade price movements of XRP without having to buy, store, or manage crypto itself.
Here are the 3 ProShares ETFs set to launch:
- ProShares Ultra XRP ETF (2x leveraged exposure to XRP futures price movements)
- ProShares Short XRP ETF (investors can profit if XRP futures prices decrease)
- ProShares Ultra Short XRP ETF (-2x leveraged exposure against XRP futures)
Notably, the SEC has still not approved a spot XRP ETF. According to Coingecko, the spot price of XRP at the time of writing is currently trading at $2.88 per token with an increase of 8.9% in the last 7 days.
See: Canada Launches First Spot Solana ETFs With Staking
Also, the CME Group, derivatives exchange, plans to introduce a cash settled XRP futures contract on May 19, 2025, pending regulatory approval.
Institutional Interest in Crypto Grows
Institutional demand for cryptocurrencies continues to grow. Below is a snapshot provided by Nate Geraci on X of the Bitcoin ETF's that launched in 2024, including the Assets Under Management (AUM) and implied revenue.
Nearly 16mos after spot btc ETFs launched, GBTC still making more $$$ than all of the other ETFs combined...
And it's not even close. pic.twitter.com/Tfn7g1j5Su
— Nate Geraci (@NateGeraci) April 27, 2025
Why It Matters
While Canadian regulators have approved spot ETFs for cryptocurrencies like Bitcoin, Ethereum, and Solana, there have been no filings for XRP ETFs in the country to date. Developments in the U.S. indicate growing demand for institutional interest in XRP, which could influence future offerings here in Canada.
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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Will Crypto Lobbying Tokens Change Political Fundraising?
Crypto | April 28, 2025
Image: Freepik/pikisuperstar
Trump's Meme Coin Dinner Contest Raises Questions About Crypto's Role in Political Fundraising
Never a dull moment. Last week, Trump announced a special dinner with the President for the top 220 token holders (see gamified leaderboard) of his $TRUMP meme coin. The event is scheduled to take place May 22, 2025 at the at Trump National Golf Club near Washington, D.C.
See: Memecoins, Regulation, and the SEC’s Changing Strategy
Following the news the token surged more than 50% in value, however the presidential self-promotion has triggered more ethical concerns including calls for impeachment by U.S. Democratic Senator Jon Ossoff who warns that selling access to a sitting president via a crypto contest could constitute 'an impeachable offense'.
Beyond Traditional Donations
Historically, political donations are highly regulated with disclosure rules, donation caps, and transparency requirements but Trump's meme coin crypto model offers anyone who buys his $TRUMP token and holds it during the contest (no political donation required), can get access to a sitting president without any sort of formal tracking or financial reporting.
The Federal Election Commission regulates official campaign fundraising but crypto tokens tied to personal brands or unofficial committees fall outside of their oversight.
The contest fuelled interpretation rumours that a minimum of $300,000 would be required to get on the list, however Trump's meme coin social team clarified on x.com that anyone could join the dinner if they are one of the top 220 token holders. As of April 28, the 220th on the leaderboard is holding about 898 tokens or a value of approx 13k USD. Participants in the contest must register their rankings which are based on time weighted holdings for the duration of the contest period.
See: Trump’s Launch Meme Coins Sparking Crypto Frenzy
The $TRUMP team also clarified that insider held tokens will remain locked for an additional 90 days to avoid concerns of a rug pull where early holders dump tokens after promotional events.
Ethics Storm and Impeachment Threats
Offering personal access to a sitting president in exchange to boost their personal token value has alarmed lawmakers. As reported by Decrypto, Senator Elizabeth Warren and Representative Adam Schiff have called for a federal ethics investigation. Senator Jon Ossoff went further, suggesting that the arrangement could justify impeachment if it is found that Trump broke the rules of how public officials and sitting presidents are supposed to behave.
Why It Matters
President Trump is sidestepping rules of how politicians are meant to act, and at the same time, cryptocurrencies are enabling politicians to raise money directly with fewer rules.
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 on Embedding Regulation Inside Smart Contracts
DeFi | April 24, 2025
Image: Freepik/fullvector
Embedding Regulation in Smart Contracts Helps But Real World Accountability Still Needed
In April 2025, the Bank for International Settlements (BIS) published a new report called 'Cryptocurrencies and decentralised finance: functions and financial stability implications' that could impact how regulators approach decentralized finance (DeFi). For the first time, the BIS explores the idea that smart contracts could help enforce certain regulatory rules within the code itself. To be clear, the BIS doesn't say that smart contract algorithms will replace oversight but it suggests that certain protections like disclosure requirements or prohibiting (or limiting) risk transactions could be built directly into the code.
See: Innovative Approaches to Smarter Regulation
At the same time, the BIS makes it clear that code alone is not enough. Behind every protocol is a developer, a team, or a group of people in-real-life (IRL) that makes decisions when designing or maintaining the system. These people often manage access, risk settings and upgrades. The BIS is saying that if DeFi is going to be safe and trusted then regulators must consider both the smart contract system and the people who develop and influence it.
Can Regulation Be Embedded Directly in Smart Contracts?
Self-executing smart contracts are at the heart of DeFi. They allow users to lend, borrow, trade, and stake assets without relying on intermediaries like a centralized financial institution. Once a smart contract is deployed to the blockchain, it executes transactions exactly as coded, without exceptions. This fact makes them potentially powerful tools for embedding and enforcing basic safeguards to protect stakeholders that interact with these contracts like investors.
The BIS seems to support this concept (BIS Paper No. 156, page 22):
“Regulation could then be embedded in smart contracts to make sure that rules were met. Examples… include ensuring that smart contracts were executed in line with the status of the ledger, that the disclosure of information took place or that ‘best execution’ requirements have been met.”
See: Stablecoin Payments Have Wings – Are You Ready?
What this means is that if a smart contract fails to meet a preset condition, such as price fairness or a collateral threshold requirement, it could automatically trigger a manual review. This would reduce the need for full manual checks on all transactions, and the smart contracts could require public disclosures are met before transactions were allowed. These types of technical safeguards would run automatically and help reduce fraud, bias, or delay. But the BIS says, automation has limits.
Someone Still Interprets Rules and Writes Code
The BIS highlights that smart contracts do not govern themselves. That is, behind every DeFi protocol is a group of developers (tech/business/legal/investor or otherwise) that decides how the code will work, who can update it, and affect the direction it takes.
BIS quotes on Page 21:
“It would be useful to analyse the entities (and persons) exerting de facto control of a DeFi protocol…”
See: BIS and Bank of Canada Launch BIS Toronto Innovation Centre
In many DeFi systems, the people involved are often anonymous or semi-anonymous, yet they can often have administrative access or governance power. Given the high stakes in such a financial system, it raises serious questions about accountability. Who is on the hook when problems arise?
Why It Matters for Canada
Canada has a strong, innovative, and growing DeFi community with many projects being launched and experimented with. These project teams often create complex and secure smart contracts but may lack a clear acc0untability structure so users can face real risks. The BIS's report outlines two layers of protection related to governance.
1. The first is technical. Smart contracts could/should enforce baseline rules around transparency, fairness, and market integrity, without human intervention.
2. The second is organizational. Developers and governance teams must be identifiable, transparent, and where appropriate, regulated. That could mean setting minimum standards, requiring disclosures, or creating a new legal category for protocol operators.
The HM Treasury in the United Kingdom released a paper in February 2023 titled "Future financial services regulatory regime for cryptoassets" that discusses various options for bringing DeFi activities into the regulatory perimeter - section 11.6:
See: DeFi Technologies Eyes Nasdaq Listing and Global Expansion
"One option for regulating DeFi is to define a set of DeFi-specific activities – e.g. 'establishing or operating a protocol' – as regulated activities under the RAO (or DAR). The persons carrying out those activities would then require authorisation, and the FCA could design a bespoke regime around these regulated activities."
Outlook
The BIS report covers a range of updated views on cryptocurrency topics, as adoption continues to grow globally. The BIS is looking for a path that DeFi can grow (not advocating to centralize or shut it down) but with guardrails to protect users and the financial system. Smarter regulation is where 'code and community' can collaborate with a novel system pushing boundaries.
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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$4.3M in Crypto Scams Triggers Operation Avalanche
Fraud Prevention | April 17, 2025
Image: Freepik
Crypto Phishing Scam Triggers Coordinated Crackdown, Authorities Contact 89 Canadians
On March 11-12, 2025, Canadian regulators led by the British Columbia Securities Commission (BCSC) and federal police coordinated a large scale effort that warned 89 crypto investors about a sophisticated scam that has already drained over $4.3 million in digital assets.
The operation, named Operation Avalanche, focused on a phishing technique that compromises users' Ethereum wallets and allows scammers to extract funds without them realizing what's happening to them.
See: BCSC Fines Fraudulent Crypto Platform ezBtc $18 Million
Operation Highlights
- $4.3 million was confirmed lost, all linked to wallet approval fraud
- 89 victims were identified and contacted by phone or email
- 7 regulatory and law enforcement agencies were involved
- 7 Canadian-registered crypto platforms supported the operation
- March 11–12, 2025 were coordinated national action days
What Is Operation Avalanche?
Led by the BCSC, Operation Avalanche was a 2 day joint initiative involving multiple provincial regulators, federal law enforcement, and crypto trading platforms. The primary objective was to track fraudulent activity on the Ethereum blockchain, identify affected wallets, and proactively alert Canadians before their funds were stolen.
The Ontario Securities Commission (OSC), Alberta Securities Commission (ASC), and Quebec’s Autorité des marchés financiers (AMF) all participated in the effort, alongside the Royal Canadian Mounted Police (RCMP), Vancouver Police, Delta Police, and the U.S. Secret Service.
See: Anatomy of Rising Deepfake Scams in Crypto and Fintech
Blockchain forensics firm, Chainalysis, provided technical support to locate and analyze all compromised wallet activity.
A total of 7 registered crypto platforms participated in the fraud prevention effort, including Netcoins, NDAX, Coinbase Canada, Wealthsimple, Shakepay who helped verify wallet ownership and victim outreach. Additionally, Kraken and Coinsquare both provided data support.
How the Scam Works
The scam uses a technique called 'approval phishing' where victims are duped into granting scammers permission to access their crypto wallets by clicking fake approval requests that look like they come from legitimate platforms. These scam links are usually sent from fraudulent websites, spoofed emails, or fake pop-ups.
Once the wallet owner grants approval, the scammer can transfer assets out of the wallet without needing login credentials or seed phrases. Most victims are unaware that this could happen until it's too late.
Tracking and Warning the Victims
The crackdown team used blockchain analytics tools to scan Ethereum for wallet addresses with suspicious approval activity. Then, they were able to link many of these wallets to real individuals with the cooperation of crypto trading platforms.
See: Can Cloned Voices Crack Bank Security? Need to Know
In total, 89 wallet holders were identified and contacted directly, warning them that their wallets were compromised or at high risk. This proactive early warning allowed some victims to revoke access or move their funds before more damage was done.
Bonnie Lysyk, EVP Enforcement at the OSC:
“Proactive and innovative approaches are crucial in disrupting fraud. By staying ahead of emerging threats and leveraging advanced technologies, we can protect investors and maintain the integrity of our financial markets.”
What to Do If You’re at Risk
If you believe they may have clicked a suspicious approval link or noticed strange transactions you should act quickly by taking key steps:
See: Canada Launches First Spot Solana ETFs With Staking
- Revoke wallet approvals using tools like Revoke.cash or Etherscan’s Token Approval Checker
- Change passwords and enable two-factor authentication (2FA) on crypto platforms
- Report the fraud to the Canadian Anti-Fraud Centre and your local regulator
- Be cautious of services claiming to retrieve lost or stolen crypto for a fee
Conclusion
Great to see the coordination among key enforcement and operational stakeholders, the 'action' and impact speaks volumes. Learn more about Operation Avalanche and more information about how to protect yourself from phishing approval scams.
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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Canada Launches First Spot Solana ETFs With Staking
Crypto Launch | April 17, 2025
AI Image: Spot Solana ETFs with Staking Launch on TSX
TSX Lists First Solana Staking ETFs in North America
Canada’s financial regulators have done it again. Credit to Bloomberg ETF analyst Eric Balchunas, who first flagged that the Ontario Securities Commission (OSC) gave the green light on April 14 for 3iQ, Evolve, CI Global Asset Management, and Purpose Investments to list the first spot Solana exchange-traded funds (ETFs) products in North America on April 16, 2025.
The new funds started trading on the Toronto Stock Exchange (TSX), offering direct ownership of Solana (SOL), including the potential to earn staking rewards. Meanwhile, U.S. investors are still limited to Solana futures ETFs while Canadian's have access to the real thing, that is spot SOL with staking which allows investors to earn additional SOL by offering them in a staking pool to help secure the network by validating blockchain transactions.
See: Crypto ETF Battle Intensifies with XRP Dogecoin and Solana
Solana is of one of the world's largest blockchains with a market cap of $69.4 billion at the time of writing. It's fast, low cost platform that powers everything from decentralized finance to NFTs, games, and even meme coins like $TRUMP. Sometimes referred to as the Ethereum killer because of its high transaction speed and low fees. SOL is the native token used to pay for network activity and also powers staking.
What Makes These ETFs Unique?
All four new ETFs actually hold SOL tokens, not futures contracts, so they are tied directly to the market price of Solana. As mentioned above, they also allow participation in staking, a key feature of Solana's proof-of-stake design.
See: Stablecoin Payments Have Wings – Are You Ready?
By staking the fund’s holdings, investors can potentially increase the amount of SOL they own over time. Staking rewards vary and are subject to blockchain conditions but typical yields for staking SOL have ranged from 6% to 8% annually. By comparison, Wealthsimple supports direct crypto investments including SOL, which currently offers a staking yield of 4.1%.
Canadian Spot Solana ETFs Comparison
| ETF Name | TSX Ticker(s) | Management Fee | Staking Notes |
| Evolve Solana ETF | SOLA (CAD), SOLA.U (USD) | 0% in 2025, 1.00% after Jan 1, 2026 | Up to 50% SOL staked. Provider not disclosed. |
| 3iQ Solana Staking ETF | SOLQ | 0% for 12+ months, then 0.15% | Uses Figment as staking provider. Staking reward split not publicly disclosed. |
| CI Galaxy Solana ETF | SOLX | 0% until July 16, then 0.35% | CI GAM receives up to 35% of staking rewards. 65% accrue to fund. Staking provider not disclosed. |
| Purpose Solana ETF | SOLL (CAD Hedged), SOLL.B (CAD), SOLL.U (USD) | 0.39% | Uses in-house validator. Staking amount and reward split not disclosed. |
Why It Matters
Canada was first to approve spot Bitcoin and spot Ethereum ETFs in 2021, and now it’s proving it's leadership again in regulated crypto innovation by approving the first spot Solana ETFs in North America (NB: first spot Solana ETF globally launched in Brazil).
See: eToro Files Nasdaq IPO After Crypto Revenue Surge
According to Investment Executive, the launch of the funds have attracted interest from firms as far as Taiwan, showing global interest in these Canadian listed crypto products. We anticipate U.S. approvals to come eventually but for now, Canadian funds have a first mover advantage, especially with staking built in.
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