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
Trump Family Launches ‘Defiant Ones’ Crypto Platform
Crypto and Politics | Aug 22, 2024
Image: Freepik
Donald Trump Jr. and Family Launch Crypto Platform the Defiant Ones
Today, on Trump's Truth Social platform, it was announced that the Trump family has launched a new crypto platform called the Defiant Ones. Led by Donald Trump Jr., the initiative reflects the family's increasing interest in crypto by promoting less regulation from the government and more freedom for people and companies. It seems the primary audience for the Defiant Ones is those seeking financial independence, which aligns with the Trump family's larger populist appeal.
From Crypto Critic to Advocate
Former U.S. president Donald Trump was once a vocal critical of Bitcoin, "it just seems like a scam. I don't like it because it's another currency competing against the dollar." but has since embraced crypto with his NFT initiatives, and 2024 political campaign around the narrative of loosening financial regulations, and strongly opposing the possibility of a U.S. Central Bank Digital Currency (CBDC) due to privacy and surveillance concerns. With Defiant Ones, the family is now fully engaged in the crypto space, and many conservative voters believe that the Trump family's influence within the sector will expand as Bitcoin's adoption and importance grows.
Kamala Harris and the Democrat's Approach to Crypto
Democratic Presidential Candidate Kamala Harris has signalled that her approach to crypto will be friendlier than Bidens (who has tightened rules in the sector), as senior advisors have communicated that she will be supportive of policies to nurture crypto industry growth.
See: Inside Federal Securities Laws and Crypto’s Tightrope
Organizations like Crypto4Harris, a grassroots network of crypto advocates and fundraisers advocating for a strategy that is more welcoming of innovation and receptive of digital assets, especially given her connections in Silicon Valley. Industry leaders are demanding less enforcement and more clarity in regulations yet it remains to be seen if the Democrats will formally adopt a more moderate stance towards crypto.
Crypto A Divisive 2024 Election Issue
Kamala Harris and the Democrats are under increasing pressure to make their positions clear as the Trump family grows their support among crypto advocates with the launch of the Defiant Ones. With crypto emerging as a key debate in the upcoming election, the way in which each side handles their approach will have a big impact on the way bitcoin legislation develops in the United States.
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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Innovative Approaches to Smarter Regulation
Smarter Regulation | Aug 14, 2024
Image: Regulatory Excellence (External Advisory Committee on Regulatory Competitiveness)
Insights on smarter regulation through transparency, adaptability, and innovative governance frameworks in AI, blockchain, and public policy
The collection of links (papers) below emphasizes creative approaches to regulating while highlighting the importance of openness, responsibility, and flexibility. These studies, which look at topics including artificial intelligence (AI), blockchain, antitrust law, and public involvement, provide important insights and food for thought into how regulatory frameworks may be agile and improved for modern times. Summertime Reading!
See: Regulatory Demands: Fintechs Caught in the Crossfire?
1. AI and Emerging Technologies Regulation
Procurement and AI in the Public Sector (June 2024)
Analyzes how procurement processes might control AI by including principles of transparency and accountability.
- How can procurement procedures ethically regulate AI?
- What part does openness play in the governance of AI?
- How can contracts guarantee the accountability of AI systems?
AI in the Courts: How Worried Should We Be? (2024)
Discusses the risks and probable biases of AI in the legal system, and proposes legislative frameworks to assure justice.
- What dangers does AI pose for courts?
- How can artificial intelligence ensure justice in judicial decisions?
- What structures are required to stop AI bias in the legal system?
Taking Training Seriously: Human Guidance and Management-Based Regulation of AI (May 2, 2024)
Human monitoring and management-based control of AI are emphasized, as is the need for strong training processes.
- Why is human oversight critical in AI regulation?
- How does training contribute to managing AI?
- How can management-based regulation ensure AI safety?
Blockchain Governance: An Empirical Analysis of User Engagement on DAOs (July 2024)
Examines the significance of user participation in the governance of decentralized autonomous organizations (DAOs).
- How does user engagement influence DAO governance?
- What challenges exist in decentralized governance?
- How can DAOs encourage active user participation?
Blockchain Governance in the Wild (Apr 2024)
Investigates the issues of real-world blockchain governance, highlighting the importance of flexible frameworks.
- What are the practical challenges in blockchain governance?
- How can governance frameworks adapt to real-world scenarios?
- What role does transparency play in effective blockchain governance?
2. General Regulatory Approaches and Legal Considerations
Advice to Canada's Treasury Board (June 2024)
The External Advisory Committee on Regulatory Competitiveness's June 2024 report offers suggestions for updating Canada's federal regulations. The paper concentrates on strengthening regulatory frameworks to increase efficiency, flexibility, and competitiveness. It emphasizes how crucial it is to interact with stakeholders, welcome technology developments, and make sure rules are precise and outcome-based.
- How can federal regulations be modernized to enhance competitiveness?
- What role do stakeholders play in shaping effective regulations?
- How can technology be leveraged to improve regulatory efficiency?
Evaluating Regulatory Performance (May 25, 2024)
Discusses how ongoing performance evaluation can help improve regulatory regimes.
- How can regulators assess if their policies are working?
- Which measures better reflect the impact of regulations?
- How does continued assessment result in improved regulation?
Public Participation and Environmental Regulation (Apr 2023)
Emphasizes the importance of public participation in developing effective and democratically valid environmental policies.
- In what ways does public involvement enhance environmental regulation?
- What difficulties does incorporating public input present?
- How can authorities guarantee significant citizen participation?
Rule Design: Defining the Regulator–Regulatee Relationship (Feb 22, 2024)
Looks at how clear rule designs might increase compliance and mutual understanding among regulators and regulatees.
- What components are essential to a well-designed rule?
- How may unambiguous rules enhance adherence?
- What difficulties do regulator-regululatee relationships present?
Antitrust Law's Place in Regulation (May 25, 2024)
Advocates for modifying antitrust laws to properly address the issues of the digital economy.
- How should antitrust laws evolve for digital markets?
- What limitations do current regulations face in the digital age?
- How can competition be fostered in fast-changing industries?
Dynamic Views of Startup Governance and Failure (May 30, 2024)
Discusses the importance of evolving governance structures in startups to manage risks and prevent failures.
- Which governance techniques aid in risk management for startups?
- How can frameworks for governance change to avoid failures?
- Which typical mistakes are made in startup governance?
Strategic Disclosures and Hedge Funds (Aug 2, 2024)
Highlights the need of addressing anomalies in hedge fund filings in order to protect investors and maintain market integrity.
- What are the risks of inconsistent hedge fund disclosures?
- How can regulators address these inconsistencies?
- What impact do strategic disclosures have on market integrity?
Conclusion
Intelligent and flexible regulation is becoming more and more important as technology and market complexity continue to grow.
See: 5 Fintech Failures and Lessons to Learn From
The various research reports and studies in this post offers regulators and legislators a road map for successfully adapting to these changes while promoting accountability, competitiveness, regulatory agility, justice, and public trust.
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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BC Crypto Trading Platform Defrauds Customers of $13M
Enforcement | Aug 12, 2024
Image: Freepik/rawpixel.com
ezBtc defrauds traders of $13 million through bogus claims of cold storage
Today, the British Columbia Securities Commission (BCSC) announced that BC-based crypto trading platform, ezBTC, has scammed clients out of $13 million by pretending to hold their assets in cold storage. David Smillie, the platform's operator, instead transferred user funds to his own accounts and online casinos. Crypto is still full of hazards and there's a pressing need for more consumer protection. Read the statement.
False claims were made by ezBtc that it would securely store client funds in cold storage. In reality, more than 935 bitcoin and 159 ether, worth around $13 million, were taken to Smillie's personal accounts and internet casinos. Customers experienced severe financial and psychological distress as a result of being unable to withdraw their money.
The BCSC came to the conclusion that Smillie and ezBtc had committed securities fraud in violation of Section 57(b) of the Securities Act. The Commission underlined that in order to prevent future instances of this kind of fraud, stronger sanctions and more widespread enforcement are required.
See: All Crypto Exchanges to Register as Investment Dealers
The findings of the BCSC highlight the deficiencies in the existing regulatory framework. It took many years, from 2016 to 2019, for customers to start complaining about the fraudulent activity.
Smillie's actions damaged investor confidence in digital asset platforms in addition to misleading investors. The CSA hosts a list of regulated platforms that are registered and allowed to do business with Canadians.
Conclusion
As digital assets become increasingly popular, there's a pressing need for strong regulatory frameworks and improved consumer protection measures. Establishing accountability and stronger oversight is critical to fostering confidence and protecting the interests of all stakeholders in the crypto ecosystem.
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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All Crypto Exchanges to Register as Investment Dealers
Crypto Regulation | Aug 12, 2024
Image: Freepik
CSA Announces All Crypto Exchange Platforms (CTPs) Must Diligently Work Towards Investment Dealer Registration
The Canadian Securities Administrators (CSA) announced on August 6, 2024 that the "interim approach for time-limited restricted dealer registration" for CTPs would be discontinued. With the termination of this status, the CSA now requires all CTPs to register as full investment dealers and join CIRO, the self-regulated, Canadian Investment Regulatory Organization. Previously, under the restricted dealer approach, crypto exchanges were able to operate with fewer restrictions while they worked towards full registration. Those days have now passed. Here's a list of crypto exchanges working with the CSA that are allowed to do business with Canadians.
The Evolution of Crypto Trading Platform Regulation in Canada
Canadian regulators have worked alongside industry over many years to learn, adapt where required while protecting investors and ensuring market stability. This was a multi-year long process that continues to evolve.
2017-2019 - Initial Regulatory Guidance
When the CSA released its initial guidelines on the applicability of securities rules to cryptocurrency trading platforms in 2017, it was the first major action taken by Canadian regulators to address the rapidly expanding cryptocurrency business. According to these guidelines, any platform that allows users to trade cryptocurrencies that are either securities or derivatives needs to abide by Canadian securities rules.
See: Canada’s Proposed Mutual Fund Crypto Regulations 2024
In 2019, Consultation Paper 21-402 (NCFA comments) was released by the CSA and the Investment Industry Regulatory Organization of Canada (IIROC). In order to facilitate trading in cryptocurrency assets that are categorized as securities, platforms must register as securities dealers, according to the regulatory framework for CTPs that was presented in this paper.
2020-2022 - Introduction of Pre-Registration Undertakings (PRUs)
During this period, the CSA also issued Staff Notice 21-327 (2020) and Staff Notice 21-329 (2021), providing further guidance on the application of securities legislation to CTPs. These notices highlighted the importance of safeguarding client assets, maintaining robust compliance systems, and managing risks associated with trading crypto assets.
Pre-Registration Undertakings (PRUs) were announced by the CSA in 2022 to help CTPs comply with regulations while maintaining their operational capacity. While their requests for full registration were being handled, these PRUs obliged unregistered CTPs to comply with a series of securities laws and remain compliant. As the sector developed, this phase was essential in creating a level of regulatory supervision.
2023 - Enhanced Oversight and Stablecoin Regulation
In 2023, crypto regs in Canada tightened further around stablecoins which were called Value-Referenced Crypto Assets (VRCAs) by Canadian regulators. The CSA made it clear that VRCA that are tethered to fiat currencies or other assets are considered securities or derivatives. CTPs had to obtain express permission from the CSA before permitting trading in VRCAs.
See: Canada to Enforce Cryptoasset Reporting by 2027
The CSA also published Staff Notice 21-332 in 2023, with further conditions for CTPs operating on a pre-registered status that required them to separate client assets in trust accounts from their own to protect investors in case of insolvency.
2024 - End Restricted Dealer Approach and Transition to Full Investment Dealer Registration Requirement
On Aug 6, 2024, the CSA and CIRO released a statement announcing that all CTPs facilitating crypto asset trading should prioritize registering as an investment dealer and to become members of CIRO. The step to register as an investment dealer has strict compliance requirements, such as minimum capital on-hand and reliable and robust risk management systems to safeguard and protect client assets. CTPs must complete registration in a prioritized manner, historically within two (2) years, and maintain active communications with CIRO during the transition to ensure they comply with all regulations. *Advised to consult a securities lawyer.
Outlook
By requiring CTPs to register as investment dealers and become members of CIRO, Canadian regulators are imposing strict operating requirements to protect the integrity of Canadian financial markets and investors, as crypto continues to go mainstream.
See: WEF Insights On Coordinating Global Crypto Regulation
The National Crowdfunding & Fintech Association (NCFA Canada) remains committed to supporting this regulatory transition and fostering innovation within the fintech sector. By providing education, market intelligence, and networking opportunities, NCFA continues to play a key role in shaping a vibrant and sustainable financial ecosystem in Canada. *If you have questions and would like to speak to a securities lawyer, get in touch: info@ncfacanada.org.
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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Brazil Approves the First Ever Spot Solana ETF
Crypto News | Aug 8, 2024
Image: Freepik
Brazil's Securities and Exchange Commission (CVM) has approved the world's first spot Solana (SOL) exchange-traded fund (ETF)
As reported by the Defiant, Brazil's Securities and Exchange Commission (CVM) has approved the first Solana (SOL) exchange-traded fund (ETF) in Brazil, the first of its kind globally.
The ETF is awaiting additional clearance from the B3 stock market in Brazil and will monitor the CME CF Solana Dollar Reference Rate, a benchmark created by the Chicago Mercantile Exchange (CME) and CF Benchmarks, and be managed by Vortx and QR Asset Management.
See: Coingecko 2024 Report: Investing in Tokenized RWAs
The launch of the ETF offers Brazilian investors diverse exposure to Solana, which at the end of the day is significant for both Brazil and the entire crypto industry.
What About 3iQ’s Solana ETP?
A Solana exchange-traded product (ETP) was proposed by Toronto-based 3iQ in June 2024 but is still sitting waiting for approval by the Ontario Securities Commission. If authorized, it will be traded as a closed-end fund on the Toronto Stock Exchange, as opposed to the continuously traded VanEck Solana Trust that was filed in the United States.
Conclusion
Brazil's approval of the world's first spot Solana ETF sets another precedent in the global crypto market.
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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Tax-Free Bitcoin Zone Proposed by the USABTC
Crypto | Aug 8, 2024
Image from USABTC website (USABTC.org)
Policy Group Advocates for a Bitcoin Tax-Free Digital Economic Zone (DEZ) in the United States
An advocacy policy group called the USABTC, is proposing that the U.S setup a Bitcoin tax-free Digital Economic Zone (DEZ) to protect the dollar's global dominance (during a time it's being challenged by BRICS) and promote economic growth. So, they are advocating for no capital gains taxes on bitcoin transactions but there would be an 'exit tax' applied whenever Bitcoin is converted back into fiat, creating a revenue stream for the government's coffers in the absence of capital gains tax revenues.
The DEZ would also be open to international participants and includes measures to protect the right to self-custody of digital assets, addressing concerns within the cryptocurrency community.
See: Record 2023 US Crypto Lobbying Expenditure
The DEZ would be implemented over several phases and in principle work like this:
- The President would issue a special order to launch the USABTC project. This directive would enable the government to purchase and trade Bitcoin through a designated fund called the "Exchange Stabilization Fund", which was established as part of the Gold Reserve Act in 1934.
- The IRS would help setup the rules of the DEZ, and then new laws would need to be passed that apply special tax treatments to Bitcoin transactions.
- The DEZ would operate on a layer 2 blockchain infrastructure with smart contracts handling all on/off ramps, transactions and conversions, thus ensuring tax compliance and asset security.
- A regulated DEZ would protect investors' money, build public trust, and maintain a stable system going forward.
Some Examples of Global Crypto Tax-Free Zones
1. El Salvador
In 2021, El Salvador took the world by storm and became the first country to recognize Bitcoin as legal money. In an effort to draw in foreign investment and smoothly incorporate Bitcoin into its economy, the country exempts foreign investors from paying taxes on Bitcoin held in its exchanges.
2. Puerto Rico
Puerto Rico is considered a US territory with independent tax laws. Crypto investors who acquire digital assets while residing in Puerto Rico are exempt from capital gains taxes, making it an attractive destination for U.S. crypto investors looking for tax breaks.
3. United Arab Emirates
For businesses dealing in digital and virtual assets, the United Arab Emirates (UAE) provides a tax-free environment, especially through free zones like the Ras Al Khaimah (RAK) free zone. The UAE is a growing hotspot for blockchain and cryptocurrency companies because of these special zones, which allow 100% foreign ownership, no corporate or personal income taxes, and no customs fees.
4. Switzerland
In Switzerland, known as 'Crypto Valley", private or individual crypto investors are exempt from crypto capital gains (not professional or self-employed traders, or businesses). The country is still at the forefront of a favourable digital asset regulatory framework, and attracts several blockchain projects.
5. Germany
If a cryptocurrency is held for more than a year, Germany exempts it from capital gains tax. As a result, Germany is becoming a more desirable location for digital asset investors thanks to this policy, which promotes long-term investment perspective.
6. Malta
Known as "Blockchain Island," Malta does not tax bitcoin capital gains for non-professional traders. Despite the possibility of income tax on trades, businesses and investors in digital assets continue to benefit greatly from the general tax system.
Conclusion
Countries like El Salvador, Puerto Rico, the UAE, Switzerland, Germany, and Malta have established themselves as crypto tax havens.
See: New US Crypto Tax Reporting Rules Starting 2025
The proposal for a U.S. Bitcoin tax-free zone called the DEZ, if implemented, might very well catapult America to forefront of the regulated crypto revolution (while maintaining the dollar's global dominance at the same time).
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 Pumps 20% After SEC vs Ripple Case Finally Ends
Enforcement | Aug 8, 2024
Image: Freepik/kjpargeter
Ripple's Legal Battle with the SEC Concludes with $125 Million Fine
On Aug 7, 2024, the case between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has finally come to an end, with Judge Analisa Torres issuing an injunction against Ripple for any potential future violations of securities laws and a $125 million civil fine.
Originally, the SEC was after a massive $1 billion disgorgement penalty and $900 million civil penalty but in the end Ripple is being required to pay a significantly reduced fee of $125 million. The difference is being attributed to the SECs regulatory approach or missteps.
See: Court Rules XRP Sales Not Investment Contracts: How the SEC Case Could Reshape Crypto Landscape
Interestingly, the court determined that Ripple violated Section 5 of the Securities Act by selling XRP to institutional investors (without registering the transaction(s) as a securities offering), however in the case of its programmatic XRP sales to retail investors the court concluded that it did not violet federal securities law.
The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company.
This is a victory for Ripple, the industry and the rule of law. The SEC’s…
— Brad Garlinghouse (@bgarlinghouse) August 7, 2024
Overview of the Ruling
- Ripple is required to pay $125 million for violating the Securities Act for the unregistered sale of XRP to institutional investors.
- The court issued a permanent injunction to prevent XRP from ever violating the Securities Act in the future. Ripple must register all future offers and sales of securities with the SEC.
See: Inside Federal Securities Laws and Crypto’s Tightrope
- Due to insufficient evidence of investor harm, the SEC's request for disgorgement was declined, so Ripple is not forced to repay any gains from the unregistered sales.
Outlook
Industry and legal experts see the verdict as a major win for industry that will impact future regulatory actions and provides a clearer regulatory framework for digital assets within U.S. securities laws, with the price of XRP pumping 20%.
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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