SME Experts have finalised an SBS guide on blockchain and DLT to raise SMEs’ awareness on how to appropriately use technology, adapt to EU legislation, and maintain consistency to standardisation activities
The oft-repeated aphorism ‘not your keys, not your crypto’ suggests that only a party running an on-chain node and possessing the private key associated with a cryptocurrency holding can reliably be considered the owner.
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
Kraken Agrees to $30 million Settlement with SEC and Stops U.S. Customer Staking Program
Image: Freepik
Crypto exchange Kraken is paying $30 million to settle charges Thursday with the Securities and Exchange Commission for allegedly violating securities rules by failing to register its crypto asset staking-as-a-service program with the SEC.
- Asked whether the SEC was moving to eliminate staking as a feature offered by the crypto industry, officials said the SEC does not regulate industries, it regulates conduct.
- Before the charges, Kraken's staking service accounted for 7.4% of staking activity on Ethererum while Coinbase accounts for another 12.5%, according to data provided by Dune. Staked ether can't be unstaked until the protocol's Shanghai upgrade anticipated in March.
- With the exception of staked ether, all U.S. Kraken clients will automatically be unstaked and will no longer earn staking rewards. Staking services for non-U.S. clients will continue uninterrupted, a spokesperson for Kraken said.
See: Canadian Securities Regulators: Crypto Trading Platform Enforcement Coming
Gary Gensler, SEC Chair:
Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors' tokens, need to provide the proper disclosures and safeguards required by our securities laws. Today's action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.
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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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Kraken (Payward Inc.) in Advanced Stages of SEC Unregistered Securities Probe
BNN Bloomberg | | Feb 8, 2023
Image: Freepik/wirestock
Kraken (legal name Payward Inc.), one of the world’s largest cryptocurrency exchanges, is embroiled in a probe by a top US financial regulator over whether it broke securities rules related to certain offerings to American clients
- The Securities and Exchange Commission probe into whether Kraken offered unregistered securities is at an advanced stage and could lead to a settlement in coming days, said the person, who asked not to be identified discussing a case that hasn’t been made public. It wasn’t immediately clear which tokens or offerings are drawing scrutiny.
- San Francisco-based Kraken is the No. 3 cryptocurrency exchange with daily trading volume of roughly $650 million globally, according to CoinMarketCap.
- Any action against Kraken could have significant ramifications for the industry, already facing sharp scrutiny in Washington after FTX’s collapse late last year. A settlement with the SEC could pressure other crypto firms to hash out deals with the regulator, which has repeatedly said most of the tokens being offered are securities that should be subject to the agency’s rules.
See: Federal Judge Dismisses Unregistered Securities Class Action Suit Against Coinbase (Shares Jump 21%)
- Kraken reached an unrelated settlement with Treasury’s Office of Foreign Assets Control late last year over allegations that it violated US sanctions against Iran. The company agreed to pay a little over $360,000 as part of the deal and invest $100,000 in sanctions compliance. OFAC at the time said Kraken voluntarily disclosed the apparent violations to the government and cooperated with its investigation.
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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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European Blockchain and DLT for SMEs Guide
European Digital SME Alliance | Omar Dhaher | Jan 31, 2023
SME Experts have finalised an SBS guide on blockchain and DLT to raise SMEs’ awareness on how to appropriately use technology, adapt to EU legislation, and maintain consistency to standardisation activities
- The EU blockchain market is expected to be valued around €59bn by 2028. SMEs can use blockchain to grow their businesses and lead the way in digitalisation and sustainability
See: More Fintech Research and Reports
- To raise awareness and assist SMEs in mastering the use of blockchain technology, a task force of Small Business Standards (SBS) and DIGITAL SME experts have finalised a SBS guide on blockchain and DLT. The intended manual wishes to Illustrate four case scenarios that demonstrate how blockchain:
- Strengthen overall business sustainability
- Help SMEs in certify their quality management system
- Ensure authentication and trust in identification
- Strengthen policy response to raising and urging geopolitical concerns
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Download the 42 page PDF report --> 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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ISDA: Navigating an Intermediary Bankruptcy in Digital Asset Markets
ISDA | Jan 26, 2023
The oft-repeated aphorism ‘not your keys, not your crypto’ suggests that only a party running an on-chain node and possessing the private key associated with a cryptocurrency holding can reliably be considered the owner.
- What defines the owner of an asset? And for a party that is not the direct owner, but holds an asset indirectly via an intermediary, what is the impact of an intermediary’s bankruptcy?
- These questions are generally settled in other financial markets, which have developed standards to protect indirectly-held customer assets by making them bankruptcy remote from the intermediary.
- The FTX collapse indicates that such norms are still evolving (or may not yet exist) in the cryptocurrency markets. When these issues are not well understood by market participants or the risks are not properly managed, unanticipated and significant loss of capital can emerge.
- The prospect of insolvency of a major market participant requires firms to consider how they manage counterparty credit risk, which intermediated or custodial structures are most appropriate, and whether the tools employed can be reliably enforced in a bankruptcy scenario. One tool available to parties may be the protection provided by a Chapter 13 bankruptcy lawyer, who can provide safeguards to support creditors and individuals in complex bankruptcy proceedings.
See: Goldman Sachs Report: Future of Digital Assets and Crypto Winter’s Discontent
- ISDA is producing two papers that will help market participants achieve greater certainty on the application of these foundational principles to the nascent digital asset derivatives market.
- This first paper will focus on close-out netting and collateral.
- The second will address issues relating to customer digital assets held with intermediaries, exploring specific questions on how they may be held, how those holdings might be treated in an insolvency scenario, and the relevant documentation and due diligence issues that would need to be addressed to achieve the intended level of customer asset protection.
Continue to the full article --> here
Download the 25 page PDF 1 of 2 report --> 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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Federal Judge Dismisses Unregistered Securities Class Action Suit Against Coinbase (Shares Jump 21%)
MarketWatch | Dean Seal | Feb 2, 2023
Image: Pixabay/sergeitokmakov
Shares of Coinbase Global Inc. rose 21% to $79.50 after a federal district judge dismissed a proposed class action accusing the crypto exchange of selling tokens that qualified as unregistered securities.
- The suit, filed in October 2021, alleged that nearly 80 of the digital assets traded on the Coinbase exchange fit the description of a security under federal law, and that Coinbase therefore violated the law by selling the tokens without proper registration.
- A New York federal judge ruled Thursday that the token buyers behind the suit have made contradictory allegations between their original complaint and a later amended complaint as to whether Coinbase actually held title to or sold the tokens, rather than just facilitate their trading on its exchange, in "an apparent attempt to evade dismissal."
See: Coinbase is Cutting 950 Employees (20%) | Brother of Former Employee 10 months Sentence for Insider Trading
- The judge further found that the terms of Coinbase's user agreement, which state that only exchange users hold title over tokens they trade, "flatly contradict" the lawsuit's allegations. Finding that further amendments would be futile, the judge dismissed the case with prejudice.
- The dismissal marks a somewhat rare legal victory for a major player in the crypto space, which is under intense scrutiny by the U.S. Securities and Exchange Commission following last year's selloff in the cryptocurrency market.
Continue to the full article --> 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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Insurers Cautioned on “Silent Crypto” Exposure
Wilson Elser Moskowitz Edelman & Dicker | Anjali Das | Jan 23, 2023
Image: Unsplash/PiggyBank
The recent implosion of crypto firm FTX and its affiliates provides a case study for potential crypto exposure under traditional insurance policies in this series of four articles
- Silent Crypto for D&O and Corporate Liability Insurance (Part I), Silent Crypto Exposure for Accountants (Part II), Silent Crypto Exposure for Lawyers (Part III), and Crime and Custody Coverage for Crypto Assets (Part IV).
See: White House Releases Comprehensive Framework for Digital Assets Highlighting 6 Key Priorities
- OCC Softens Stance on Banks' Cryptocurrency Activities: In the past few years, the U.S. Office of the Comptroller of the Currency (OCC) has issued a series of interpretative letters and guidance regarding the agency's loosening stance on banks engaged in cryptocurrency activities.
- First, OCC confirmed that banks may provide cryptocurrency custody services to customers by holding the "unique cryptographic keys associated with cryptocurrency.
- Second, OCC has indicated that banks also may hold reserves to support "stablecoin" transactions.
- Third, OCC has authorized banks to participate in cryptocurrency transactions based on blockchain or DLT, including independent node verification networks (INVNs).
- With advances in technology and the global financial markets, there is "increasing demand in the market for faster and more efficient payments through the use of decentralized technologies, such as INVNs, which validate and record financial transactions, including stablecoin transactions."6 As such, the OCC has concluded that a "bank may validate, store and record payments transactions by serving as a node [or participant] on an INVN.
- OCC's softer stance on cryptocurrency activities by banks has opened the door for traditional financial institutions to participate in a limited capacity. In October 2022, the nation's oldest bank, BNY Mellon, announced the launch of its Digital Asset Custody platform to hold and transfer Bitcoin and Ether (ETH) for select clients.
See: Are Markets Moving Towards a Crypto Fiduciary + Caveat Emptor Standard?
- Don't Count on FDIC Insurance for Crypto Assets:
- The Federal Deposit Insurance Corporation (FDIC) has made it abundantly clear that FDIC insurance does not apply to financial products such as "crypto assets" or other types of securities or commodities. Moreover, FDIC insurance "does not protect against the default, insolvency, or bankruptcy of any non-bank entity, including crypto custodians, exchanges, brokers, wallet providers, and neobanks."
- Digital Asset Vault & Wallet Insurance: In growing recognition of the need for insurance as a risk management tool for cryptocurrency and digital asset custodial services, insurance companies are slowly wading into the market with new and innovative products.
Continue to the full article --> 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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NFT Use Cases are Establishing New Legal Frontiers
Kramer Levin | Jan 23, 2023
Image: Unsplash/Milad Fakurian
As the applications for NFTs grow, the legal considerations expand, particularly when the NFTs are used in ways that touch on multiple areas of the law.
- Creative work NFTs: NFTs are associated with a particular work, be it an image, video, music, or writing (currently the most popular use case)
- The most typical legal issues with these NFTs involve contract law and IP licensing in copyrights and trademarks.
- Any rights to the copyrighted art must be sold or explicitly licensed to the NFT purchaser to be properly conveyed. For example, there may be issues on what rights are provided to the person who holds the NFT, including whether they can commercially exploit the art and, if so, what limitations are placed on this usage.
- Failure to notify a purchaser of what rights they are obtaining can lead to confusion because purchasers of NFTs often assume they are buying full ownership the actual artwork and can do what they want with them, such as exploit the artwork commercially.
- A new and rapidly expanding consideration is when an NFT is generated in whole or part by artificial intelligence (AI). There may also be the layering of issues, such as when AI is fed a copyrighted piece or pieces of work to generate new works that alter, expand or build upon the work it was fed.
- Another consideration that can arise under some uses for NFTs is if they are securities, meaning that they would be regulated by the Securities and Exchange Commission (SEC) if sold to customers in the U.S.
See: Aftermath Islands Metaverse Launches Events Pavilion with Over 1.1 Million Player-Generated Resource Pack NFTs
- NFTs for Metaverse and gaming: For example, an NFT could be associated with having the ability to unlock the use of a particular character in a game. Or it could be used as part of an inventory system to identify the character’s equipment, where a particular set of armor is associated with a corresponding NFT. NFTs can also be sold in random “packs” similar to trading cards or can be associated with ownership of a particular plot of virtual land within that particular world.
- NFT collectibles, fantasy sports and gambling. In addition to the legal considerations discussed above, this type of use that provides prizes must consider gambling and related contest and sweepstake laws, which are often regulated differently state by state. These factors must be considered specific to what is provided with the NFT at issue and the jurisdiction(s) over the purchase.
- NFTs linked to real-world assets: NFTs have also become linked to real-world physical assets and signify ownership or some right associated with that asset. Instead of keeping physical records on real property in a city hall archive as the definitive record of ownership, this information could be recorded on the blockchain. In this manner, it could be easily searched and verified.
- The ability to transfer ownership rights in real-world physical assets already has an extensive legal background. These include issues related to contract law, real estate law, tax compliance, the Uniform Commercial Code (UCC), etc. For example, real estate has its own unique body of law governing, for example, how to record and transfer property. Any usage of NFTs for real property would be required to navigate these laws in addition to those generally governing NFTs.
See: After you die what happens to your digital assets and NFTs?
- NFTs and identity: there are limits to what can be done without having a transaction tied to a particular real-life person or at least some measure of a user’s reputation.
- For example, the above scenario of a DeFi loan is based on what can be locked in as collateral on the blockchain. It does not consider other off-chain assets that may support the borrower’s creditworthiness or that the borrower had taken out loans before and always paid them back. In other instances, users should be verified for anti-money laundering (AML) purposes.
Continue to the full article --> 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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