ComplianceX | Jack Kelly | Apr 20, 2022
For the second time in a month, the Securities and Exchange Commission has the crypto industry up in arms about what it calls an attempt at backdoor regulation that, depending on who you ask, falls anywhere on the spectrum between opaque and unconstitutional.
At issue is an expansion of the definition of a stock exchange to fit what the SEC calls “communications protocol systems” that “bring together buyers and sellers of securities” — which many experts believe would include cryptocurrency exchanges, and specifically, decentralized exchanges (DEXs).
Digital assets are not mentioned anywhere in the bill — mirroring complaints made in late March about another rule change that would define the automated market maker (AMM) smart contracts that act as liquidity providers in decentralized finance (DeFi) projects like lending/borrowing platforms.
Digital assets were mentioned in one footnote in that 200-page rule. That rule, which would encompass even software developers to register as securities dealers, according to, Delphi Digital Labs’ general counsel Gabriel Shapiro who called it:
An all-out shadow attack on decentralized finance. More regulation-by-enforcement” that is “far from technology-neutral”. [The result will be to] to entrench incumbents who have legacy centralized business models and amount to a de facto prohibition on the decentralized finance models that have arisen.
As for the exchange-focused rule, Shapiro said in a Twitter chain Monday (April 18) that it was “more regulation-by-enforcement” that is “far from technology-neutral” and will ensnare even DeFi software developers.
Coinbase’s Chief Legal Officer, Paul Grewal said:
The SEC is going beyond its authority under the Exchange Act in redefining exchange. An exchange is a facility that performs the ‘functions of a stock exchange, as that term is generally understood. The SEC should provide clearer guidance in the future about how the market should apply its rules.
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
 |  |  |
|---|---|---|
 |  |  |
Investment Executive | James Langton | Apr 8, 2022
In yesterday’s budget, the federal government announced plans to launch a new authority, the Canada Financial Crimes Agency, which it envisions as the future lead law enforcement agency in the fight against financial crime.
Alongside the launch of a new federal policing unit, the budget also pledged increased funding — $89.9 million over five years, and $8.8 million annually after that — to beef up the existing AML agency, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). This represents a 24% increase to FINTRAC’s budget, and provisions for a 13% increase in staff.
Government in the budget said:
“This increased capacity will enable FINTRAC to implement new anti-money laundering and anti-terrorist financing requirements for crowdfunding platforms and payment service providers; support the supervision of federally regulated financial institutions; continue to build expertise related to virtual currency; modernize its compliance functions; and update its financial management, human resources, intelligence, and disaster recovery systems.”
It’s also already working on legislative changes to strengthen the existing AML legislation, the Criminal Code, and other legislation, “to enhance the ability of authorities to detect, deter, investigate, and prosecute financial crimes,” the budget said; while also enabling the government to tackle emerging threats that may not be covered under the existing regime.
Investment Executive | James Langton | Apr 7, 2022
In today federal budget, the government announced plans for a review, led by the Department of Finance, which will examine the so-called “digitalization” of money and its possible impact on the traditional financial sector. The budget pledged $17.7 million in funding over five years to finance a review that will, among other things, consider the need for a central bank digital currency (CBDC) in Canada.
A number of countries are exploring the potential of CBDCs, with the idea that their development could enhance payment systems, foster financial innovation and improve inclusion, while potentially reducing credit and liquidity risk. However, there also concerns that the introduction of CBDCs could undermine bank deposits, which are a traditional source of bank funding; while also cutting into banks’ revenues from payments processing. The government said that the review will also consider how to adapt the financial sector’s regulatory framework to deal with the risks posed by the digitalization of money; and, how to maintain the security and stability of the financial sector amid the development of these emerging technologies.
“The first phase of the review will be directed at digital currencies, including cryptocurrencies and stablecoins,” the government said in today’s budget.
The budget also reiterated the federal government’s pledge to amend financial sector legislation to overhaul the banking sector’s dispute resolution regime.
Specifically, the government indicated that it will introduce amendments to “provide for a single, non-profit external complaints handling body (ECB) in banking and to strengthen the ECB system.”
“Canadians deserve a fair and impartial process to address unresolved complaints with their banks,” the government said in today’s budget. “Banks should not be able to choose the complaints handling body they participate in, and the system should not be run on a for-profit basis.”
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
| | |
|---|---|---|
| | |
BIS and Swiss National Bank | Apr 4, 2022
Conference hosted by the BIS Innovation Hub and the Swiss National Bank, 4 April, 2022, Zurich, Switzerland. This conference aims to establish a common understanding on how DeFi-based markets might evolve from their current state, what role central banks might have, and the potential interaction with Central Bank Digital Currencies.
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
| | |
|---|---|---|
| | |
SEC | Hester Peirce | Apr 1, 2022
Thank you, Barry [Miller]. Thank you also to Professor Ajai Singh. It is a pleasure to be part of the University of Central Florida’s inaugural FinTech Summit. This morning, I would like to discuss the ways in which financial regulators ought to engage with innovation. Before I begin, I will give my standard disclaimer: the views I express are my own and not necessarily those of the Securities and Exchange Commission (“SEC”) or my fellow Commissioners.
People are skeptical of new things, including innovations that end up transforming their lives. Regulators share this fundamental human trait. Just as other people, regulators like dealing with known quantities: a rulebook they have mastered; familiar regulated entities that know and love the rulebook almost as well as the regulators do; and time-tested technologies and business processes that fit neatly into that rulebook. But this affection for the familiar is typically even more pronounced among regulators. For one thing, regulatory agencies draw very smart and talented, but risk-averse, employees, many of whom are lawyers, a profession not known to be entrepreneurial; I can say so in this crowd of engineers and business people.[7]
For another, regulators generally operate under incentives that make them look skeptically at the unknown and the new: They are rarely rewarded for innovation, and any performance metrics generally measure their productivity in numbers of rules, exams, or enforcement actions. Doing things the way they have always been done—which is probably also the way that saw the regulator’s predecessors off to a happy, fulfilling retirement—seldom carries significant risk. Departure from tried-and-true methods, on the other hand, creates all sorts of risks.
If regulators approach technology with a sense of wonder, not fear, they might also spot ways in which it makes it easier to accomplish regulatory objectives such as investor protection and market integrity. Let us look at a couple examples.
While we do not have time to talk in depth about crypto today, it too offers opportunities to better achieve certain regulatory objectives. Decentralized finance (“DeFi”) can serve investor protection goals and market resilience goals by cutting out middlemen from financial transactions and breaking down concentration within the financial services industry. Moreover, in a recent article, Professor Chris Brummer imagines using “crypto-native solutions,” such as smart contracts, non-fungible tokens, decentralized autonomous organizations, and Decentralized Identifiers to build a retail-oriented disclosure system that would be superior to existing traditional disclosure systems in that it would provide disclosures in a form and manner that people would actually use.[26] The objective, as he puts it, is to allow “disclosure systems [to] grow with technology instead of being superseded by it.”[27] Yes, crypto raises some real challenges and risks for society, but it also may help society to achieve some of the things the SEC cares about—protecting investors, facilitating capital formation, and fostering market integrity.
If innovation is to thrive in a regulated space, regulation needs to leave room for experimentation, tinkering, and, yes, failure.
SEC Chair Gary Gensler has said, “I am technology-neutral. I think that [crypto] technology has been and can continue to be a catalyst for change, but technologies don’t last long if they stay outside of the regulatory framework.”[31] Describing this approach as technology-neutral, of course, works only if new technology can in fact comply with a prescriptive rule set designed for old technology, which is not at all clear.[32 Even if it can work, though, technologies forced into an inflexible, stultifying regulatory framework may not last long either because they cannot go through the trial-and-error process that allows them to mature and thrive. In other words, it is not enough to say that we welcome innovation; we also have to welcome the conditions under which innovation is possible.
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
| | |
|---|---|---|
| | |
Edmonton Journal | | Mar 30, 2022
Alberta’s UCP government says finance technology companies need temporary relief from privacy and investment laws to give the province an edge in attracting business.Finance Minister Travis Toews introduced Bill 13, the Financial Innovation Act, Wednesday, which if passed, will create a “regulatory sandbox” for financial services and financial technology, or fintech, companies.
Regulatory sandboxes are designed to make it simpler for companies to test new products and services that current security regulations were not designed to deal with, with a small set of customers.
At a news conference earlier Wednesday, Toews said the government hasn’t received any specific proposals yet, but there is strong interest from businesses, including in the cryptocurrency, or decentralized digital currency, sector.
“These are going to be products that simply would not be otherwise offered without some type of exemptive relief,” said Toews, adding that relief will be limited to two years, with government oversight and consumer protection safeguards in place.
The province’s information and privacy commissioner will need to provide approval on a case-by-case basis, companies will need to get the express permission of customers before using specific personal information, and there would be fines for those who break the terms and conditions — up to $100,000 for the first offence, or up to $200,000 after that.
Koleya Karringten, executive director of the Canadian Blockchain Consortium, said at the government news conference:
“[bill 13] is a gamechanger [as] the current regulatory framework, it wasn’t created with cryptocurrency and additional service providers in mind. This legislation creates valuable space for development and market testing without the lengthy delays while Alberta laws catch up to our blockchain innovation.”
RdnewsNOW | Mar 30, 2022
Officials say this proposed legislation signals that Alberta is willing to work with innovators and businesses that are developing cutting-edge products and technologies. The sandbox would be the first of its kind in Canada, say government officials, meaning financial services and fintech companies will have a strong incentive to move to Alberta. It’s anticipated to also benefit Albertans by opening the door to a wider variety of products and services, which could lead to more competition and lower costs for consumers.
“Ensuring Alberta’s financial system is modern, competitive and stable is essential to strengthening and growing our economy,” stated Kate Hill, Chief Risk & Compliance Officer, Alberta Central. “Alberta credit unions support the government’s financial services regulatory sandbox and the significant potential it brings for innovation in our province’s financial services sector.”
If the Financial Innovation Act passes, each company participating in the sandbox will have to meet the following criteria:
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
| | |
|---|---|---|
| | |
FP | Ethan Lou | Mar 30, 2022
If you’ve ever wondered how onerous it is to register as a securities dealer with the Ontario Securities Commission, wonder no more. The cryptocurrency trading platform Bitbuy Technologies Inc. has put a dollar figure on it: more than $1.5 million.
That’s the overall increase in spending, including hiring more qualified staff, to deal with the new, more stringent crypto requirements from Canadian regulators, Bitbuy’s chief executive Michael Arbus said in an email. Additional compliance costs are in the “multi-millions” per year, he added.
Arbus was speaking ahead of Kevin O’Leary-backed WonderFi Technologies Inc.’s purchase of Bitbuy’s parent First Ledger Corp. in a $206 million deal that closed last Thursday.
That combined company, a spokesman said, has grand ambitions to “consolidate the Canadian digital asset industry, potentially acquiring smaller exchanges,” a goal tied directly to the burden those smaller players face when it comes to registering as securities dealers.
At the same time, crypto mergers and acquisitions have been running wild. According to a PricewaterhouseCoopers report, the value of such deals globally went up nearly 5,000 per cent in 2021 to reach US$5.5 billion. For crypto trading planforms dealing with heavy compliance costs, there might just be even more consolidation ahead.
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
| | |
|---|---|---|
| | |
CNBC | Ryan Browne | Mar 20, 2022
The U.K.’s Financial Conduct Authority said Wednesday it is giving some crypto companies more time to register with the regulator beyond an original Mar. 31 deadline.
A select few firms, including the fintech company Revolut and crypto start-up Copper, will be allowed to continue trading after a temporary registration regime closes, the FCA said in an update on its website. Copper counts the former U.K. finance minister, Philip Hammond, as an advisor.
The temporary register closes on Friday “for all but for a small number of firms where it is strictly necessary to continue to have temporary registration,” the FCA said. “This is necessary where a firm may be pursuing an appeal or may have particular winding-down circumstances.”
Crypto firms operating in the U.K. are required to be registered with the FCA under money laundering regulations. But several companies have yet to make the cut. The FCA set up a temporary register to allow firms to continue trading while they sought full authorization.
The list of firms on the temporary register has shrunk considerably in recent weeks, with market maker B2C2 and trading app Wirex among the firms withdrawing their applications.
Paysafe, a fintech firm that is on the FCA’s full register. Chirag Patel, CEO of Paysafe’s digital wallets division:
[we welcome] heightened regulatory oversight [of the crypto industry]. The U.K.’s registration regime will mean that a number of companies will inevitably need to exit the U.K. market because they are unable to meet the necessary standards in terms of risk and compliance.”
Still, there’s been a backlash from the crypto industry over the FCA’s handling of the registration process. Industry insiders previously told CNBC the regulator is understaffed and has been slow to approve applications.
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
| | |
|---|---|---|
| | |
August 26th, 2025
January 4th, 2024
June 1st, 2021
September 9th, 2020
July 9th, 2018
January 3rd, 2018
September 25th, 2017
June 20th, 2017
May 10th, 2017
December 14th, 2016
