The proposal gives the CFTC a leading role and pushes for the creation of a self-regulatory organization like FINRA.
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
OSC Publishes Statement of Allegations Against KuKcoin For Failing to Comply with Ontario Securities Law
OSC Release | Jun 7, 2022
TORONTO – The Ontario Securities Commission (OSC) today published a Statement of Allegations against Mek Global Limited, incorporated in the Republic of Seychelles, and PhoenixFin Pte. Ltd., incorporated in Singapore, (collectively, KuCoin) for failing to comply with Ontario securities law. KuCoin is operating an unregistered crypto asset trading platform, encouraging Ontarians to use the platform, and allowing Ontario residents to trade crypto asset products that are securities and derivatives.
On March 29, 2021, the OSC warned crypto asset trading platforms that offer trading in derivatives or securities in Ontario that they must contact OSC staff or face potential regulatory action. Platforms were given until April 19, 2021 to discuss how to bring their operations as a dealer or marketplace into compliance. Additionally, the OSC stated that platforms that allow access to Ontarians are regarded by the OSC as operating in Ontario for the purposes of securities regulation.
Despite this warning, KuCoin did not contact the OSC.
See: Alberta-based Binance Canada expects to return to Ontario by 2024
Staff will continue to take action against non-compliant crypto asset trading platforms and are in contact with international securities regulators to exchange information to support enforcement action.
The Capital Markets Tribunal, Office of the Secretary, issued a Notice of Hearing on June 7, 2021 setting the matter down to be heard on July 6, 2021 at 11:00 a.m. or as soon thereafter as the hearing can be held in the above named matter.
The OSC thanks the Seychelles Financial Services Authority for their assistance in the KuCoin matter.
View the original release --> here
Download the 30 page PDF Capital Markets Tribunal Hearing --> here
Or view the Statement of Allegations online --> 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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Lawyer Says SEC’s New Crypto Cops Are Coming for DeFi
Roll Call | Peter Feltman | Jun 14, 2022
The Securities and Exchange Commission’s decision to beef up its cryptocurrency enforcement staff could signal new worries for digital asset exchanges and others in the industry, as the agency broadens its view of whether some cryptocurrencies are securities. The SEC has plenty of potential targets, including non-fungible tokens, stablecoins and platforms that might come under the agency's authority if they trade digital tokens that are securities
- It will add 20 enforcement positions dedicated to crypto, boosting the total enforcement staff focused on digital assets to 50
- Those tracking the development say the agency will delve deep, looking for violations among a crop of startup ventures.
See: DeFi Advocates Call out the SEC (Again) over attempts to define ‘Exchange’
Ian McGinley, a partner at Akin Gump Strauss Hauer & Feld LLP, said he expects special scrutiny on one of the newest areas of digital assets: decentralized finance platforms, called DeFi for short. These ventures often use the decentralized structure to establish peer-to-peer markets, in which users engage in financial transactions with other parties directly, without an intermediary such as a stock exchange or bank.
- He pointed out that SEC Chairman Gary Gensler has already said the agency is examining them. A small number of DeFis handle much of the total activity in the sector. According to Gensler, the top five DeFi platforms account for about 80 percent of the total trading on all platforms.
- If in fact the decentralized platform is controlled by a small group, I think you are likely to see some actions.
- If an exchange is purely decentralized, then it is very hard for the SEC to make the case that the exchange is selling securities.
- Expects the SEC to pursue cases against non-fungible tokens, which some consider to be the strangest new development in digital assets.
- With NFTs, an investor or customer buys a marker on a distributed ledger that is attached to artwork or music. The owners of NFTs don't always own the original items, just the digital marker.
- The NFT structure can be used in other ways, however, such as to represent shares of a company or to serve as currency in video games.
See: SEC Considering 50 Rule Changes: “One of the largest regulatory agendas in years”
“It's highly likely we will see some SEC enforcement in NFTs, especially since we’ve seen some state regulators recently take action against some NFT projects for selling unregistered securities,” McGinley said.
SEC Commissioner Hester Peirce has said that fractional NFTs, which represent shared ownership, might be securities, though she said additional guidance from the agency would be helpful.
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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Digital Canadian Dollar: The Required Steps for Canada
CIGI | Robert Fay, David Dodge, Serge Dupont, Mark Jewett, John Murray, Keldon Bester | Jun 22, 2022
A growing number of countries around the world are considering or implementing retail central bank digital currencies (CBDCs) that could be used by both consumers and businesses. Before Canada joins its peers in this endeavour, it can learn from their experiences.
This conference report is based on an April 2022 workshop attended by Canadian and international experts.
See: Podcast: CBDC implementation models and the role of the private sector including Payments Canada architect
The discussion focused on the international backdrop and what can be learned from global leaders in CBDCs, to determine next steps for Canada and to assess the legal and regulatory changes required to support a Canadian CBDC.
Table of Contents
- Introduction
- What does the international CBDC landscape look like?
- What steps can Canada take to prepare for a CBDC?
- What legislative and regulatory action is needed to implement a Canadian retail CBDC?
- Conclusion: The hard work lies ahead
Continue to view the 18 page 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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Important Nuances in the Lummis‐Gillibrand Crypto Bill: Not Securities?
Cato | Jack Solowey | Jun 10, 2022
On June 7, 2022, senators Cynthia Lummis (R‑WY) and Kirsten Gillibrand (D‑NY) unveiled their highly anticipated crypto bill. The bipartisan Lummis‐Gillibrand Responsible Financial Innovation Act covers some of the most contested issues in crypto regulation, including taxation, stablecoins, digital asset exchanges, interoperability with the banking system, and compliance with anti‐money laundering laws and sanctions.
Notably, the bill seeks to clarify the extent to which digital assets ought to be regulated as securities by the Securities and Exchange Commission (SEC) or commodities by the Commodity Futures Trading Commission (CFTC). Some reactions to the bill have couched the Lummis‐Gillibrand solution as handing the reins to the CFTC.
See: The Lummis-Gillibrand Bill Puts the CFTC in Charge: A Win for the Crypto Industry
However, this characterization glosses over key features of the bill, under which commodities or securities regulations may apply to crypto projects, depending on the circumstances. The question that the Lummis‐Gillibrand bill seeks to answer is less “whether” it is the SEC or the CFTC that has a role to play in crypto regulation so much as “when” each agency does.
Under the bill, while a digital asset itself may be a CFTC‐regulated commodity, where that asset is sold in connection with a type of security known as an “investment contract,” the contract still will be considered an SEC‐regulated security.
The SEC has found investment contracts to exist when, for example, crypto tokens are sold during so‐called initial coin offerings (ICOs), which raise money for early‐stage crypto projects. The Lummis‐Gillibrand bill recognizes that digital assets will continue to be sold like this. Therefore, the bill introduces the concept of an “ancillary asset.”
See: Alleged US$16 million crypto theft case to test ‘Code is law’ defence in Canada
Under this framework, where a crypto token is, for instance, sold alongside an investment‐like opportunity that helps to finance a crypto project, the token itself may be presumed to be a commodity while the contract documenting the investment remains a security. In such cases, the bill would require the token seller to make applicable disclosures to the SEC.
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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The Lummis-Gillibrand Bill Puts the CFTC in Charge: A Win for the Crypto Industry
Protocol | Benjemin Pimental | Jun 7, 2022
The proposal gives the CFTC a leading role and pushes for the creation of a self-regulatory organization like FINRA.
The Responsible Financial Innovation Act, introduced by Republican Sen. Cynthia Lummis and Democrat Kirsten Gillibrand, lays out how cryptocurrencies should be defined and regulated. If it becomes law, it would be a victory for the crypto industry, which has long complained about insufficient or vague regulations governing digital assets and what it sees as the SEC’s aggressive enforcement-first posture.
- The bill supports positions endorsed by the crypto industry, including the key argument that many cryptocurrencies should not be subject to securities regulations.
- As was revealed in a leaked version of the bill, Lummis and Gillibrand would hand over key oversight responsibility to the CFTC, not the SEC, which has been known for aggressive enforcement actions against crypto companies under Gensler.
- The bill would also require the CFTC and SEC to lead a study of creating a “self-regulatory organization” that would play “a complementary role, working with regulators to allow them to be more nimble and efficient, while maintaining strong supervision.”
- The bill also resolves some regulatory gaps, clarifying everything from the tax treatment of crypto transactions to the reporting requirements for crypto companies.
- People could make purchases with appreciated virtual assets “without having to account for and report income” up to a certain threshold.
- Miners, node operators and other crypto-transaction participants will not be considered “brokers” for income tax purposes, which would impose reporting requirements on them.
- Calls for the creation of a federal regulatory sandbox and the bill also calls on the Federal Energy Regulatory Commission to “analyze and report” on energy consumption in the digital assets market.
See: Yellen Renews Call for Stablecoin Regulation After Terra’s algorithmic stablecoin tumbles
Some Reactions
- The Wyoming senator, one of crypto’s staunchest advocates who disclosed that she held more than $100,000 in bitcoin last year, said in a statement that it is “critical that Congress carefully crafts legislation that promotes innovation while protecting the consumer against bad actors.”
- Gillibrand, who represents New York, said the bill offers a framework that “spurs innovation, develops clear standards, defines appropriate jurisdictional boundaries and protects consumers.”
- Crane said the Lummis-Gillibrand bill offers “a thoughtful approach” to crypto regulation and “proposes to establish a mature regulatory framework that would empower regulators to bring digital asset markets more in line with existing regulated markets.”
- Fagel also called the proposal “a step in the right direction.”
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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Binance BNB Coin Takes a Hit on News of Potential SEC Investigation
Nasdaq |
Binance Coin (BNB) was down 8% this morning on news reports of a possible Securities and Exchange Commission (SEC) investigation. According to Bloomberg, investigators will probe whether Binance should have registered its initial coin offering (ICO) as a security sale. The Bloomberg report quoted anonymous inside sources, but the investigation has not been officially confirmed by the SEC or Binance.
The difference between cryptocurrencies and securities
There are various agencies involved in cryptocurrency regulation in the U.S. The Commodity Futures Trading Commission (CFTC) and the SEC both play key roles. Most cryptos currently count as commodities and come under the purview of the CFTC. But the SEC argues that some projects are actually securities, and should instead fall under its jurisdiction.
See: Amidst Regulatory Controversy Binance Launches $1 Billion Crypto Fund
The discussion over whether some cryptocurrencies are actually securities is key to several of the regulatory tangles faced by the industry. If a product is a security, it needs to follow strict rules -- for example, in how it reports information. There are also rules about how securities can be traded. If a product is a commodity, it doesn't have to abide by the same playbook.
Speaking last year, SEC Chair Gary Gensler said that many ICOs were actually securities. He argued that crypto is like the Wild West, and needs more control and more investor protection. Gensler says a number of cryptos fit the definition of an investment contract -- a type of security -- and should be subject to securities laws. "I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight," he said.
The SEC already has an ongoing court battle with one cryptocurrency -- Ripple (XRP) -- that it says operated as an unregistered security. The SEC filed charges in December 2020, accusing Ripple of failing to register its XRP token as a security. Ripple disagrees and argues that the SEC should have given much clearer instructions about what constituted a security.
What it means for investors
A SEC investigation is concerning for BNB holders, particularly as it isn't Binance's only regulatory headache. Last year, Binance had issues in various countries, including the U.K., U.S., Japan, Germany, Thailand, and others. The probe may come to nothing, but ongoing issues with various different authorities could pose a threat to BNB's long-term viability. Binance has increased its compliance team by 500% and says that it is serious about regulatory compliance. It remains to be seen whether this will prove to be too little, too late.
Continue to the full article --> here
Reuters | Angus Berwick and Tom Wilson | Jun 6, 2022
In Depth Reuters Investigation: Binance had no idea who was moving money through their exchange
For five years, the world’s largest cryptocurrency exchange Binance served as a conduit for the laundering of at least $2.35 billion in illicit funds, a Reuters investigation has found.
In September 2020, a North Korean hacking group known as Lazarus broke into a small Slovakian crypto exchange and stole virtual currency worth some $5.4 million. It was one of a string of cyber heists by Lazarus that Washington said were aimed at funding North Korea’s nuclear weapons programme.
See: Alberta-based Binance Canada expects to return to Ontario by 2024
Several hours later, the hackers opened at least two dozen anonymous accounts on Binance, the world’s largest cryptocurrency exchange, enabling them to convert the stolen funds and obscure the money trail, correspondence between Slovakia’s national police and Binance reveals.
In as little as nine minutes, using only encrypted email addresses as identification, the Lazarus hackers created Binance accounts and traded crypto stolen from Eterbase, the Slovakian exchange, according to account records that Binance shared with the police and that are reported here for the first time.
because of the anonymous nature of the accounts, said Eterbase co-founder Robert Auxt, whose firm has been unable to locate or recover the funds.
Eterbase’s lost money is part of a torrent of illicit funds that flowed through Binance from 2017 to 2021, a Reuters investigation has found.
During this period, Binance processed transactions totalling at least $2.35 billion stemming from hacks, investment frauds and illegal drug sales, Reuters calculated from an examination of court records, statements by law enforcement and blockchain data, compiled for the news agency by two blockchain analysis firms. Two industry experts reviewed the calculation and agreed with the estimate.
See: Fraud Prevention Month: CSA encourages Canadians to ask questions before investing in crypto assets
Separately, crypto researcher Chainalysis, hired by U.S. government agencies to track illegal flows, concluded in a 2020 report that Binance received criminal funds totalling $770 million in 2019 alone, more than any other crypto exchange. Binance CEO Changpeng Zhao accused Chainalysis on Twitter of “bad business etiquette.”
Reuters’ new reporting following the April article shows that many people who signed up to Binance in Russia weren’t using it for trading. Instead, Binance became a key payment provider for Hydra, the giant darknet marketplace, according to the blockchain data compiled for Reuters, a review of Hydra user forums, and interviews with illegal drug users and researchers.
After it was set up in 2015, Hydra distributed narcotics on behalf of drug dealers, all priced in bitcoin, to millions of buyers, mostly in Russia.
German police, in coordination with U.S. authorities, seized Hydra’s servers in Germany in April, closing the site down. The U.S. indicted a Russian resident, Dmitry Pavlov, for administering the servers. A week later, Russian authorities arrested Pavlov for allegedly dealing in drugs, a Moscow court said, adding he had filed an appeal.
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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Do Industry Operators, Researchers, and Regulators Agree On How Big Crypto Crime Is?
Coindesk | Jack Schickler | May 9, 2022
The European Union is in late-stage talks over how to implement new rules intended to curb dodgy behavior that uses virtual assets – but estimates of the share of crypto payments linked to financial crime vary wildly from 0.15% to a whopping 46% of transaction volumes.
But attempting to get a handle on the exact scale of unlawful virtual asset activity isn’t easy. It usually relies on identifying crypto addresses that appear suspect and totting up their trade volume – but illicit users generally prefer to hide in the shadows.
See: CipherTrace August 2021 Crypto Crime Report: Crypto Fraud Dips as DeFi Hacks Grow
People in the crypto industry like to quote the figures on the lower end of the range, and on Friday, Binance’s CEO Changpeng “CZ” Zhao tweeted statistics to argue that crypto is safer than fiat. According to the U.N. Office on Drugs and Crime, money laundering through conventional finance is worth as much as $2 trillion, comparable to the total value of all the world’s crypto markets combined.
But regulators are worried not just about the overall volumes, but what they represent as a share of the crypto sector. They’ve noted how fast virtual assets are gaining popularity, and are thinking about what the scale of the problem might be in future, not just today.
In a report published in July 2021, FATF noticed significant variations in estimates of illicit crypto trades both over time and among different analysts, such as Chainalysis, Elliptic and Merkle Science – which could be, Grauer said, because they look at a different universe of transactions or currencies.
Whatever the reason, FATF believes that the analysts’ estimates of the percentage of transactions that are unlawful, which range from 0.1% to 15.4%, are all too low.
See: Senator Cynthia Lummis’ landmark crypto bill: Full Draft
This matters for live policy. In March, the European Parliament voted to introduce new checks on the identities of those making even the smallest crypto payments – including, most controversially, when transactions are made with unhosted wallets that aren’t managed by a regulated exchange.
The idea – whose details still need to be finalized with national governments – is that law enforcement would then be able to more easily track crypto transactions that could be used to fund serious crimes, such as terrorism or child pornography. But the move met with a slew of opposition from industry players such as Coinbase (COIN), who said the bill could stifle innovation and harm privacy.
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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