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
SEC Chair Gensler’s Mixed Feedback at Senate Hearing
Regulatory Insights | Sep 13, 2023
Image: Unsplash/Harold Mendoza
SEC Chair Gary Gensler recently appeared before the Senate Banking Committee on Tuesday, September 12, 2023, where he faced both praise and criticism regarding the oversight of his department.
Some key takeaways from the hearing:
Oversight and Regulatory Approach
- Gensler was questioned about the oversight of the Securities and Exchange Commission (SEC).
- His regulatory approach drew criticism, especially from Republican Senator Tim Scott. Scott accused Gensler of potentially increasing costs for public companies with climate disclosure rules and hindering pro-growth initiatives.
- Scott emphasized a need for a slower regulatory pace, stating:
"The breakneck pace you are pumping out regulations should not be applauded."
Grayscale Bitcoin Trust Ruling and Crypto Oversight
- Gensler was asked about a judge's ruling in favor of Grayscale in its bid to convert its Grayscale Bitcoin Trust (GBTC) into an ETF. Gensler mentioned that his team is still reviewing the decision.
- Gensler commented on the crypto field, mentioning that it is rife with noncompliance. He stated:
"..in [my] 44 years in financial markets, [I haven't] seen noncompliance to this extent in any other field, calling it "daunting."
See: Wall Street Opposes a Controversial Retail Investor Proposal by SEC Chair Gary Gensler
Climate Disclosure Rules
- Gensler faced questions regarding the SEC's proposed climate disclosure rule. Critics, including Senator Scott, believe that this rule could quadruple costs for public companies.
- Democratic Senator Jon Tester also expressed concerns about the impact of these rules on local Montana farm ranchers.
Watch the On-demand Video
The hearing highlighted the challenges and responsibilities faced by the SEC under Gensler's leadership. While some praised his efforts, others expressed concerns about the pace and direction of regulations, especially concerning climate disclosure rules and cryptocurrency oversight.
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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FTX’s Potential $3.4B Liquidation Sparks Crypto Price Concerns
Crypto | Sep 12, 2023
Image: Unsplash/Kanchanara
The crypto market is anticipating a potential sell-off due to the implosion of FTX in 2022 and the subsequent bankruptcy proceedings. The Delaware bankruptcy court is expected to rule on the $3.4 billion asset sale on September 13.
In the wake of recent events surrounding the FTX exchange's collapse, the cryptocurrency market is facing renewed pressure. The once-prominent FTX, which imploded in November 2022, is gearing up to appear in Delaware Bankruptcy Court on September 13.
The exchange seeks approval to liquidate $3.4 billion in Bitcoin and other cryptocurrencies.
See: Trust Fallacy: 75% of Payment Fraud in Crypto is Carried Out by KYC-verified Accounts
This move follows the company's proposal to employ blockchain firm Galaxy Digital to supervise the sale and management of reclaimed user funds.
If sanctioned, FTX could unload up to $100 million of crypto tokens weekly, potentially ramping up to $200 million for specific assets.
As the crypto community awaits the court's verdict, there's growing apprehension that an FTX-driven fire sale might bear a negative impact on already-vulnerable cryptocurrencies, especially those in FTX's possession.
FTX has the following cryptocurrencies in its possession that may be sold:
- Solana (SOL): $685 million in locked Solana tokens.
- FTT: $529 million.
- Bitcoin (BTC): $268 million.
- Ethereum (ETH): $90 million.
- Dogecoin (DOGE): $42 million.
See: Digital Asset Classification vs Wire Fraud: What’s the Most Powerful Law in Crypto Right Now
This impending action has heightened concerns within the crypto community, as such a massive sell-off could further destabilize an already sensitive market. The situation underscores the volatility and unpredictability inherent in the cryptocurrency sector.
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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A Global Approach to DeFi Regulation
Regulation | Sep 7, 2023
Recognizing the borderless nature of DeFi and its potential to revolutionize financial markets, IOSCO has established a global approach to address the associated risks and uncertainties.
In a media release dated September 7, 2023, IOSCO unveiled nine policy recommendations that span six crucial areas, ensuring a comprehensive framework for DeFi regulation. These recommendations are a testament to IOSCO’s commitment to fostering innovation while upholding market integrity and investor protection.
Key Areas of Focus
The six crucial areas covered by the International Organization of Securities Commissions (IOSCO) in their policy recommendations for Decentralized Finance (DeFi) are:
See: Bank of Canada Publishes Analytical Notes on DeFi
- Understanding DeFi Arrangements and Structures: Analyzing DeFi products, services, arrangements, and activities to assess how existing regulatory frameworks might apply and identifying any potential gaps in regulation.
- Achieving Common Regulatory Standards: Working towards consistency in regulatory frameworks and oversight across different jurisdictions to ensure a level playing field and to address the cross-border nature of DeFi.
- Managing Key Risks: Identifying and addressing the material risks associated with DeFi, including operational, technological, and market risks, to protect investors and ensure market integrity.
- Ensuring Clear Disclosures: Requiring clear, accurate, and comprehensive disclosures from DeFi participants to provide investors with the information they need to make informed decisions.
- Enforcing Applicable Laws: Ensuring that existing laws and regulations are enforced, and taking action against DeFi participants that operate outside of regulatory frameworks or engage in illicit activities.
- Enhancing Cross-Border Cooperation: Promoting cooperation and information sharing among regulators to address the challenges posed by the global and decentralized nature of DeFi, and to coordinate responses to cross-border regulatory and enforcement issues.
These areas are designed to provide a comprehensive framework for the regulation of DeFi, addressing the unique challenges posed by this emerging sector and ensuring that investors are protected and markets remain stable and transparent.
Public Consultation
In a move to promote transparency and inclusivity, IOSCO has opened the floor for public consultation, inviting stakeholders to provide their input on the policy recommendations. The consultation period is set to conclude on October 19, 2023, with the finalization of the DeFi recommendations expected by the end of the year. This collaborative approach ensures that the final policy framework is well-rounded and takes into account the diverse perspectives of all stakeholders involved.
See: Adapting IOSCO Principles to Digital Assets Markets
To stay updated on the progress of IOSCO’s DeFi policy recommendations and to contribute to the public consultation, visit IOSCO's official website. Together, we can shape the future of finance and ensure that DeFi reaches its full potential in a secure and regulated environment.
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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New U.S. Crypto Accounting Rules Come Into Effect in 2024
Regulation | Sep 7, 2023
Image: Unsplash/Kelly Sikkema
The U.S. Financial Accounting Standards Board (FASB) has unanimously voted to introduce new accounting rules for businesses with significant crypto holdings. These rules will provide guidelines on measuring the value of Bitcoin, Ethereum, and other cryptocurrencies in company assets.
Under the new rules, companies that invest in cryptocurrency will be required to report their holdings at fair value. This approach aims to capture the most current value of an asset, including any rebounds in value after price dips. This is a significant shift from the current practice where companies record their crypto at the historical price they paid.
Thescope of the FASB's focus remains narrow, covering assets based on blockchain technology and secured through cryptography. Notably, non-fungible tokens (NFTs), stablecoins, and wrapped tokens are not covered by these rules.
See: Digital Assets Research: Blockchain Accounting and Tax Solutions
The new accounting rules are expected to be published by the end of the year and will go into effect for fiscal years starting after December 15, 2024. However, companies will have the option to apply them early.
Major companies like Tesla and MicroStrategy, which have invested heavily in Bitcoin, will benefit from these new rules. The fair-value approach will provide a more accurate representation of a company's financial position, allowing investors to make more informed decisions.
Impact
Michael Saylor, the founder and former CEO of MicroStrategy:
"..highlighted that these new rules eliminate a significant barrier to corporate adoption of Bitcoin as a treasury asset."
The introduction of these new accounting rules marks a significant step forward in the integration of cryptocurrency into mainstream financial practices.
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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Decentralized Finance: Uniswap’s Legal Victory Sheds Light
DeFi | Sep 1, 2023
Image: Unsplash/Wesley Tingey
In a significant turn of events for the decentralized finance (DeFi) sector, a class-action lawsuit against Uniswap, a leading decentralized exchange, has been fully dismissed.
The Lawsuit
- The lawsuit was spearheaded by Nessa Risley, representing a cohort of Uniswap users, the plaintiffs. They directed their accusations not only at Uniswap's developers but also at its high-profile investors, including the likes of Andreessen Horowitz. The five defendants named in the case were originally charged in April 2022 with “unlawful promotion, offer, and sale of unregistered securities."
See: SEC Asserts DeFi is Caught Under Securities Rules, Reopens Proposal to Widen Definition of Exchanges
- The group alleged that Uniswap acted as an unregistered broker and dealer, facilitated the offering of unregistered securities, and indirectly enabled token issuers to defraud investors. Tokens such as Matrix Samurai (MXS), Rocket Bunny (BUNNY), and Alphawolf Finance (AWF) were central to this dispute.
- From the investors' viewpoint, the heart of the matter was the losses they incurred from what they believed were scam tokens. Their contention was that these tokens, acquired between December 2020 and March 2022, were fraudulent, leading to substantial financial setbacks. The group's primary legal argument hinged on the belief that these tokens were, in essence, securities, implying that Uniswap operated as a platform for trading such securities.
The Verdict
- The United States District Court for the Southern District of New York, under Judge Katherine Polk Failla, dismissed the lawsuit. Note, Judge Failla is also presiding over the Securities and Exchange Commission’s case against Coinbase. Read the full verdict here
"As set forth in the remainder of this Opinion, the Court dismisses their complaint in full."
The Rationale
- Judge Katherine Polk Failla, presiding over the case, emphasized that the decentralized architecture of Uniswap makes it inherently challenging to pinpoint liability (challenging to identify liable parties).
- Drawing a parallel, she likened it to holding payment apps accountable for illicit transactions rather than the perpetrators.
- She also wrote, "no plaintiff would sue the New York Stock Exchange or NASDAQ for tweeting that its exchange was a safe place to trade after that
plaintiff had lost money due to an issuer’s fraudulent schemes."
See: DeFi Advocates Call out the SEC (Again) over attempts to define ‘Exchange’
- The court filing declared that just because the investors bought the scam tokens on Uniswap does not mean the decentralized protocol itself is liable.
- Judge Failla mentioned that the lack of regulatory clarity in the crypto industry does not help their case in retrieving funds.
- She referenced the 2022 class action lawsuit against Coinbase, which was unsuccessful due to unregulated securities sales, and dismissed the current case with prejudice, preventing any possibility of a retrial.
DeFi Precedent
- The dismissal of the lawsuit against Uniswap is not just a singular event but a precedent for the DeFi sector. It underscores the complexities surrounding the regulation of decentralized platforms and underscores the urgency for clear regulatory frameworks, while also highlighting the resilience and innovation inherent in the crypto community.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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SEC Postpones Approval for All Spot Bitcoin ETF Submissions
Regulation | Sep 1, 2023
Image: Unsplash/Erik Mclean
The SEC has once again postponed its verdict on a slew of spot bitcoin ETF applications
- Notable applicants awaiting the commission's decision include industry giants such as BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise, and Valkyrie Digital Assets. These applications, which were initially filed earlier this year, have now been deferred until October.
- The applicants, which comprise both crypto-centric and traditional finance firms, aim to introduce the first spot bitcoin ETF. Such an ETF would pave the way for increased retail investment in Bitcoin, eliminating the complexities of setting up a digital wallet or purchasing Bitcoin directly. The SEC, however, has chosen to extend the existing comment periods, allowing for enhanced public feedback on these applications.
See: The Race for Ethereum Futures ETF Applications
- The SEC's procedural approach entails a maximum review period of 240 days from the initiation of the application review. Historically, the commission has utilized the entire review duration, pushing final decisions to the end of this period.
Source: James Seyffart @JSeyff, ‘X’ platform
Grayscale's Triumph and Its Implications
- A pivotal moment in this narrative was the recent legal victory of Grayscale Investments. The D.C. Circuit Court of Appeals ruled in favor of Grayscale, critiquing some of the SEC's reasons for rejecting Bitcoin ETF applications as "arbitrary and capricious." Grayscale's contention was that the SEC lacked a concrete foundation to decline its proposal to transition the Grayscale Bitcoin Trust into an ETF.
- Judge Neomi Rao, representing the unanimous court, highlighted inconsistencies in the SEC's decision-making. She emphasized the near-perfect correlation between spot and futures market prices of Bitcoin and questioned the SEC's differential treatment of similar products.
The Road Ahead
- The appeals court has now instructed the SEC to revisit Grayscale's application, setting a precedent for other ETF applications. This development, coupled with Grayscale's persuasive argument that its proposed ETF closely mirrors futures ETFs, has reignited optimism within the crypto community. It's not a matter of 'if but when' sentiment.
See: Historic Nod from Regulators. Coinbase Secures Approval for Crypto Futures Trading
- The SEC's evolving stance on Bitcoin ETFs is emblematic of the broader regulatory challenges and opportunities facing the crypto industry. As the commission navigates this complex terrain, its decisions will undoubtedly shape the future of cryptocurrency investments in the U.S.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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SEC’s Sealed Court Filing Raises Eyebrows for Potential Binance Setback
Enforcement | Aug 30, 2023
Image: Unsplash/Dayne Topkin
In a recent development that has the crypto community on edge, the U.S. Securities and Exchange Commission (SEC) has made a secretive court filing concerning Binance which has led to speculation and concern about what might be looming for the crypto giant.
With legal complexities arising in the crypto world, it's crucial to have experienced criminal appeal lawyers to navigate such challenges. Here's what we know according to Coindesk:
- The SEC submitted a sealed motion in its ongoing case against Binance. This motion allows the SEC to file sensitive or potentially confidential information without making its contents public.
- Accompanying this motion were over 35 exhibits, a declaration from Jennifer Farer, an SEC trial attorney, and a proposed order.
See: Binance.US Refutes SEC’s Wash Trading Allegations
- Binance, which already faces U.S. accusations of wrongdoing, has yet to comment on this development.
- John Reed Stark, a former SEC official, highlighted the rarity of such a move. He suggested two potential reasons for the SEC's action: either the SEC is trying to avoid interfering with a criminal investigation by the U.S. Department of Justice, or there are concerns about the safety of a witness or company.
- It's worth noting that the SEC had previously sued Binance in June, alleging violations of federal securities laws. The accusations revolved around Binance offering unregistered securities in the form of its BNB token and Binance USD (BUSD) stablecoin.
Stark emphasized the unusual nature of the SEC's recent action, stating that in his extensive experience with the SEC, he cannot recall ever seeking to file a motion or any other court document under seal.
What’s Up With The Secret U.S. SEC Motion Relating to Binance?
In the U.S. SEC/Binance litigation, the U.S. SEC has filed a sealed motion for leave to file documents under seal, according to an SEC court filing late yesterday. Filing a court document “under seal” allows… pic.twitter.com/cmx6gdh2so
— John Reed Stark (@JohnReedStark) August 29, 2023
This development has left many wondering about the implications for Binance and the broader cryptocurrency industry.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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