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
Bittrex’s $24 Million Settlement: Unpacking the SEC’s Latest Move in the Crypto Arena
Regulatory News | Aug 11, 2023
Image: Pixabay/succo
Bittrex's $24 million settlement with the SEC highlights the tightening regulatory scrutiny on crypto exchanges offering unregistered securities to U.S. investors.
In a pivotal moment for the cryptocurrency industry, Bittrex, one of the leading crypto exchanges, has reached a significant settlement with the Securities and Exchange Commission (SEC). The $24 million agreement, stemming from allegations of offering unregistered securities to U.S. investors, not only underscores the regulatory challenges crypto platforms face but also sets a precedent for the industry's future.
- Settlement Amount: Bittrex, a prominent crypto exchange, has agreed to a settlement with the Securities and Exchange Commission (SEC). The exchange will pay a fine of $24 million. This settlement comes after the SEC accused Bittrex of offering U.S. investors access to unregistered securities.
- Details of the Fine: The total fine of $24 million is broken down as follows:
- $14.4 million in disgorgement
- $4 million as prejudgment interest on the disgorgement
- $5.6 million in civil money penalties.
Bittrex's U.S. arm, which filed for bankruptcy in May, has a deadline of 90 days post the effectiveness of its liquidation plan to pay the SEC. If the exchange fails to pay its fees and penalties by March 1 of the following year, the SEC may seek a court judgment.
- Allegations and Charges: The SEC's primary contention was that Bittrex operated as a securities exchange, broker, and clearinghouse without registering for any of these roles with the regulatory body. The SEC also alleged that Bittrex instructed crypto issuers to remove public statements that might indicate their tokens could be in violation of securities laws.
- Other Exchanges: Bittrex wasn't the only crypto exchange under the SEC's radar. Other major exchanges like Coinbase and Binance.US faced similar charges.
- Statements from SEC: The SEC Enforcement Director, Gurbir Grewal, emphasized that merely changing labels or descriptions won't absolve entities from liabilities. The economic realities of the offerings are what truly matter. The SEC is keen on ensuring compliance in the crypto industry and aims to provide relief to affected investors.
With major exchanges under scrutiny, the SEC's stance on crypto compliance becomes increasingly significant.
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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The Race for Ethereum Futures ETF Applications
News | Aug 8, 2023
Image: Unsplash/Jievani Weerasinghe
The race for Ethereum Futures ETF applications has intensified, with numerous high-profile firms submitting their applications to the U.S. Securities and Exchange Commission (SEC).
Here's a comprehensive overview of the current landscape:
1. ProShares
- Ether Strategy ETF: Filed on 07/27/2023, with an expected SEC response by 10/11/2023. The ETF aims to list on the CBOE BZX Exchange. The proposed ETF will invest up to 25% of its assets in cash-settled Ether futures contracts traded on the CFTC-regulated Chicago Mercantile Exchange (CME). It may also invest in reverse purchase agreements and shares of other investment companies but will not directly invest in Ethereum.
- Short Ether Strategy ETF and ProShares Ether Strategy ETF: Both ETFs aim to qualify as regulated investment companies. Their investment in corresponding subsidiaries based in the Cayman Islands will not exceed 25% of the total assets at each quarter end of the fiscal year.
See: SEC Rejects Bid to Turn the Largest Bitcoin Fund Into an ETF -> Grayscale Sues SEC
2. Bitwise
- Ethereum Strategy ETF: Filed on 08/01/2023, with an expected SEC response by 10/16/2023. The ETF plans to list on the NYSE Arca. The fund will not invest directly in ETH futures contracts. Instead, investments will be channeled through a wholly-owned subsidiary in the Cayman Islands. The fund seeks to achieve its investment objective primarily through its investment in ETH Futures Contracts, with the remaining 75% of assets expected to be invested in U.S. Treasuries and other U.S. government obligations.
3. Roundhill
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- Roundhill Ether Strategy ETF: The New York-based Roundhill Investments, with $662 million of assets under management across eight ETFs, plans to invest up to 25% of its assets in a wholly-owned subsidiary in the Cayman Islands.
4. VanEck
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- VanEck Ethereum Strategy ETF: The ETF may invest in equity securities of ETH-related companies if it faces constraints like position limits or liquidity issues. The ETF also expects to have significant holdings of cash and fixed-income investments.
5. Grayscale Investments
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- Grayscale Ethereum Futures ETF: The ETF is an actively-managed fund that seeks exposure to Ethereum futures contracts through a Cayman Islands-based subsidiary. The fund plans to hold approximately 100% of its net assets in Ethereum futures contracts but may also have significant holdings of cash and cash equivalent investments.
See: BlackRock’s Bitcoin ETF Filing Fuels Bullish Momentum for Grayscale Bitcoin Trust
6. Direxion
- Bitcoin Ether Strategy ETF: Direxion filed its application for a combined Bitcoin and Ether Futures Fund on 08/02/2023. The fund's shares would be issued and redeemed only in large blocks called "Creation Units," comprising 25,000 shares each.
7. Bitwise
- Bitcoin and Ether Market Weight ETF: The fund's strategy is to invest in either Bitcoin or Ether futures contracts, with the allocation based on the relative market capitalization between the two cryptocurrencies.
8. Proshares
- Bitcoin & Ether Strategy ETF Bitcoin: The fund seeks to qualify as a regulated investment company and expects to invest a portion of its assets in a wholly-owned subsidiary in the Cayman Islands.
See: Ninepoint Unveils Web3 Innovators Fund
The surge in applications indicates a growing interest and confidence in Ethereum futures among institutional investors. As the SEC reviews these applications, the crypto community eagerly awaits the potential approval and the subsequent impact on the Ethereum 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, 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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Decoding Judge Rakoff’s Opinion: What It Means for Future Crypto Regulations
Crypto Regulation | Aug 8
Image: Unsplash/Conny Schneider
"Crypto got Rakoff’d" delves into the legal intricacies of the SEC's Ripple case, highlighting the contrasting protections for institutional and retail investors in the crypto landscape.
Current Ripple Case Rationale
- A US district judge's hearing on the SEC's Ripple case led to a surge of joy in the crypto community. The judge's rationale was that institutional buyers expected Ripple to use the capital from its sales to enhance the XRP ecosystem and increase the XRP price.
- In contrast, programmatic buyers (retail buyers and sellers) couldn't have the same expectations. The court held that while big institutional investors get SEC protection, retail traders don't because they aren't privy to the inner workings of the crypto world.
- Ripple Judge Quote: "Whereas the Institutional Buyers reasonably expected that Ripple would use the capital it received from its sales to improve the XRP ecosystem and thereby increase the price of XRP . . . Programmatic Buyers [i.e., retail buyers and sellers] could not reasonably expect the same."
Enter Highly Respected Judge Rakoff's Opinion
- Judge Rakoff rejected many of the usual defenses presented in crypto cases. He particularly took issue with the distinction made between institutional and retail buyers in the Ripple case. He argued that the Howey test, which determines what constitutes a security, doesn't differentiate between types of purchasers. Whether a coin was bought directly from the defendants or in a secondary resale transaction doesn't impact the perception of promises of profits based on the defendant's efforts.
Watch: Brookings: The Future of Crypto Regulation (On Demand and Transcript)
- The implication of Judge Rakoff's opinion is that the distinction made between institutional and retail buyers in the Ripple case is not valid. He challenges the idea that securities law should treat institutional and retail investors differently based on their understanding or knowledge of the crypto industry. By rejecting many of the usual defenses presented in crypto cases and emphasizing that the Howey test doesn't differentiate between types of purchasers, Judge Rakoff's stance suggests that all investors, regardless of their size or sophistication, should be afforded the same protections under securities law.
Conclusion
Judge Rakoff's perspective on the Ripple case underscores the importance of equitable treatment for all investors within the realm of securities law. By challenging established distinctions between institutional and retail investors, he emphasizes the need for consistent legal interpretations and protections in the rapidly evolving crypto industry. This stance not only sets a precedent for future crypto-related cases but also calls for a more inclusive and fair approach to investor rights and protections.
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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Coinbase’s CEO Speaks Out on the SEC’s Request to Delist Assets (Except Bitcoin)
Regulatory News | Aug 4, 2023
Image: Pixabay/Geralt
The recent legal battle between Coinbase and the SEC over the request to delist all crypto assets other than Bitcoin has sent ripples through the crypto industry.
Here are the three most important takeaways from this unfolding situation:
1. Stifling of Innovation: Coinbase's CEO, Armstrong, expressed that complying with the SEC's request would have "essentially meant the end of the crypto industry in the U.S." This highlights the delicate balance between regulation and innovation, where overreach could stifle growth and creativity in the burgeoning crypto space.
2. Legal and Regulatory Uncertainty: The decision by Coinbase to go to court against the SEC underscores the ongoing challenges and uncertainties in defining and enforcing crypto regulations. The lack of clarity in SEC rules and the potential for legal challenges not only affect Coinbase but create a precedent that could impact other major players in the crypto industry.
See: Coinbase Faces Legal Action from US SEC for Alleged Market Rule Violations
3. Impact on Investor Confidence and Market Dynamics: The legal battle and the potential delisting of assets other than Bitcoin could lead to significant volatility and hesitancy among investors. The situation reflects broader concerns about investor trust in U.S. capital markets and the need for transparent and fair regulations.
Brian Armstrong, Coinbase CEO:
We really didn't have a choice at that point. Delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the U.S.
These takeaways emphasize the complex interplay between regulation, innovation, legal challenges, and market dynamics in the crypto industry. The resolution of the Coinbase-SEC situation will likely have lasting implications for the future of the crypto economy in the U.S.
Binance, the world's largest crypto exchange, conducted monthly transactions worth $90 billion in China, a market where it is officially banned, according to a report published by the Wall Street Journal.
These transactions made China Binance's largest market, accounting for 20% of its global volume, excluding trades made by a subset of very large traders. Binance withdrew from mainland China in 2017 during a regulatory crackdown, and its website is currently blocked in the country. The exchange has also been under scrutiny by U.S. regulators, including the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). More here
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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A New Era: Financial Stability Board Releases Final Recommendations for Cryptoasset Activities and Markets
Regulation | Aug 2, 2023
The Financial Stability Board (FSB) unveils a comprehensive framework for international consistency in the regulation of cryptoassets, addressing both crypto-asset activities and 'global stablecoin' arrangements.
- The Financial Stability Board (FSB) has released its final recommendations for regulating cryptoassets and related services, marking a significant step towards international regulatory harmony. These guidelines are part of the FSB's ongoing efforts in the categories of Banking, Cross-border, FinTech, and UK.
- The recommendations aim to provide a common base for international regulatory coverage of cryptoassets, a technology that has previously seen inconsistent regulatory development. The FSB's high-level recommendations offer domestic regulators a basic framework for crafting their own regulatory regimes.
See: House Committee Introduces Digital Asset Legislation: The Financial Innovation and Technology for the 21st Century Act
- The guidelines are expected to influence the UK's upcoming proposals for cryptoasset regulation and may also impact the future development of areas not currently covered by the EU's regulatory framework under MiCA.
- The FSB's shared workplan indicates continued engagement in this area, including a joint report with the International Monetary Fund (IMF) later this year.
Recommendations on Crypto-Asset Activities and Markets
- Regulatory Powers and Tools: Authorities must have appropriate powers, tools, and resources.
- General Regulatory Framework: Apply comprehensive regulation consistent with the principle "same activity, same risk, same regulation."
- Cross-Border Cooperation: Foster efficient communication and consistency of regulatory outcomes.
- Governance: Require clear governance frameworks.
- Risk Management: Implement effective risk management frameworks.
- Data Collection: Ensure robust frameworks for data collection, storage, and reporting.
- Disclosures: Mandate clear and transparent information disclosure.
- Addressing Financial Stability Risks: Monitor and address interconnections within the crypto-asset ecosystem.
Revised Recommendations on 'Global Stablecoin' Arrangements:
- Authorities' Readiness: Have appropriate powers, tools, and resources.
- Comprehensive Oversight: Apply consistent regulatory requirements.
- Cross-Border Cooperation: Foster communication and coordination across borders.
- Governance Structures: Require comprehensive governance frameworks.
- Risk Management: Address risks, including operational resilience and cyber security.
- Data Storage: Implement robust frameworks for data storage and access.
- Recovery and Resolution: Require appropriate recovery and resolution plans.
- Redemption Rights: Ensure robust legal claims and timely redemption.
Conclusion
The FSB's final recommendations represent a significant milestone in the global regulation of cryptoassets. By providing a voluntary yet comprehensive framework, the FSB has laid the groundwork for a more consistent and transparent regulatory environment. The impact of these recommendations on domestic and international regulatory landscapes will be closely watched in the coming months, as governments and regulatory bodies work to implement these guidelines into their respective legal frameworks.
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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House Committee Introduces Digital Asset Legislation: The Financial Innovation and Technology for the 21st Century Act
Release | Jul 27, 2023
The House Committees on Financial Services and Agriculture have introduced a groundbreaking piece of legislation, the Financial Innovation and Technology for the 21st Century Act.
The legislation, introduced by French Hill, Chairman of the Subcommittee on Digital Assets, Financial Technology and Inclusion, Glenn "GT" Thompson, Chairman of the House Committee on Agriculture, and Dusty Johnson, Chairman of the Subcommittee on Commodity Markets, Digital Assets, and Rural Development, is a significant milestone in the efforts to establish a regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space.
See: Court Rules XRP Sales Not Investment Contracts: How the SEC Case Could Reshape Crypto Landscape
This act aims to establish a comprehensive regulatory framework for digital assets, fostering innovation while ensuring robust consumer protection.
Key features of the bill include:
- Increased oversight from the Commodities Future Trading Commission (CFTC).
- Exemption from registration for digital assets that meet specific requirements, including sales limits and ownership restrictions.
- Mandatory registration of intermediaries with the SEC or CFTC.
- Disclosure requirements similar to securities.
- Recognition that stablecoins and digital commodities are not securities.
- Provision for alternative trading systems (ATS) to trade digital assets and disintermediated trading.
- Establishment of a Joint Advisory Committee on Digital Assets involving both the SEC and CFTC.
- Mandated further study on Decentralized Finance (DeFi).
The bill is a response to the need for regulatory clarity in the digital asset space, which has been muddled with regulatory uncertainty and a lack of authority. It aims to provide clear rules of the road for market participants, ensuring financial security and certainty as digital asset developers continue to innovate.
Also read: Crypto Bill 2.0: Lummis-Gillibrand’s Vision for a Regulated Crypto Future
The legislation is expected to be considered in both the House Committees on Financial Services and Agriculture in the coming week. This introduction marks a pivotal moment for America's standing as the global leader in innovation and technology adoption, with digital assets and their underlying blockchain technology seen as the building blocks for the next generation of the internet.
The introduction of this legislation comes at a time when the European Union has approved comprehensive legislation, the Markets in Crypto Assets (MiCA), to create an updated regulatory ecosystem to support digital assets. Meanwhile, the SEC's regulation-by-enforcement approach has left many frustrated, highlighting the need for clear, supportive legislation like the Financial Innovation and Technology for the 21st Century Act.
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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Consultation Until Sep 20, 2023: OSFI Proposes New Guidelines for Crypto-Asset Exposures in Canada
OSFI Consultation | Jul 26, 2023
The Office of the Superintendent of Financial Institutions (OSFI) in Canada has announced proposed changes to its capital and liquidity approach for crypto-assets. This move is in response to the evolving risk environment and international developments in the crypto space. Consultation open until Sep 20, 2023.
OSFI has released two draft guidelines for public consultation, one for federally regulated deposit-taking institutions and another for insurers. These guidelines aim to provide clarity on the regulatory capital treatment of crypto-asset exposures. The guidelines are open for public consultation until September 20, 2023.
The proposed changes follow the new banking standards for crypto-asset exposures released by the Basel Committee on Banking Supervision in December 2022. The new guidelines from OSFI are expected to replace the interim advisory on the regulatory treatment of crypto-asset exposures, which was published in August 2022, and will come into effect in early 2025.
See: Canadian Regulators Set Expectations for Crypto Asset Investment Funds: A Comprehensive Overview
The new guidelines propose a simplified approach and a comprehensive approach, depending on the extent of an institution's exposure to crypto-assets. They detail four classifications of crypto-assets and the capital treatment for each. The banking guideline reflects the December 2022 BCBS banking standard, while the insurance guideline incorporates relevant parts of the BCBS standard with adjustments to meet the specific context of the insurance industry.
These guidelines will replace the interim advisory on the regulatory treatment of crypto-asset exposures, published in August 2022, when they come into effect in early 2025.
The two draft guidelines will be open for public consultation until September 20, 2023. Comments can be sent to consultations@osfi‑bsif.gc.ca.
Peter Routledge, Superintendent of Financial Institutions:
“Deposit-taking institutions and insurers need clarity on how to treat crypto-asset exposures when it comes to capital and liquidity. We look forward to giving them this clarity through these new guidelines that reflect industry input and international standards.”
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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