Dealers must prepare for ongoing CFR reviews and expiring pandemic exemptions, priorities report says
Cryptocurrency figures praised the ‘constructive approach’ that focuses on innovation rather than strict regulation
US president Joe Biden is expected to sign an executive order on cryptocurrency this week that will mark the first step toward regulating how digital currency is traded.
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
Responsible Development of Digital Assets (Crypto): Decoding Biden’s Executive Order
CATO Institute | Nicholas Anthony | Mar 9, 2022
President Biden’s executive order on cryptocurrency is finally here. Despite the anxiety that has been brewing since talks about the order first emerged in January, it is ultimately seeking answers, not action. And luckily for the President, the Cato Institute has many of the answers he seeks.
Let’s consider a few of the questions from the order.
1. What type of regulations are needed to establish consumer protection and financial stability?
There’s been no shortage of discussions in the space regarding how cryptocurrency regulation might take shape. In fact, Jennifer Schulp even hosted a four‐part event series dedicated to digging deeper into the discussion (Parts 1, 2, 3, and 4).
See: Updated Report: Regulation of Cryptocurrency Around the World (Nov 2021)
As the Biden administration digs into this question, however, it is critically important that the discussion is built on a sound foundation. Senator Tommy Tuberville (R‑AL) made this point well at a senate hearing last week when he asked witnesses what market failures need to be addressed in the cryptocurrency market. Before any new regulatory regime is launched, it’s critical that this question be addressed.
For specific examples of how to best regulate, see:
- A Simple Proposal for Regulating Stablecoins
- A “Narrow” Path to Efficient Digital Currency
- The Trap of the Trilemma of Cryptocurrency Regulation
2. Should the Federal Reserve issue a central bank digital currency, or CBDC? And what are the merits of a CBDC?
Another big debate in the realm of digital currencies has been whether the Federal Reserve (Fed) should issue a central bank digital currency (CBDC). The answer, quite simply, is no. As the recent events in Canada made clear, a CBDC would risk creating a direct line that might be weaponized by the government to control the public.
See: E-CNY to be accepted at this month’s games, as over 80 countries work towards a CBDC
As for what merits a CBDC might offer, one need only look at the Fed’s own discussion paper. After years of flirting with the idea of a CBDC and a year spent on writing the discussion paper, the Fed was only able to come up with four potential benefits of a CBDC. Considering each of these potential benefits are already being delivered through other endeavors, the Fed has not made a case for issuing a CBDC. As Cato scholars have argued, the United States would be better off renouncing plans to launch a CBDC.
For more on why the Fed should not issue a CBDC, see:
- The Fed Finally Announced Its CBDC Ideas
- The U.S. Should Disavow CBDCs and Set the Standard for Protecting Financial Privacy
- How Canada Made the Case for Cryptocurrency, Not CBDCs
3. What is the environmental impact of cryptocurrency use?
The environmental cost of cryptocurrencies has been another headline topic. It’s an issue that has come up at nearly every congressional hearing on cryptocurrency and it was even the sole focus of a hearing hosted by the Senate Committee on Energy and Commerce in January so it’s little surprise to see it here.
Continue to the full article --> here
View the White House Executive Order on 'Responsible Development of Digital Assets' --> here
GBBC | Release | March 9, 2022
The much anticipated order seeks to outline a “whole-of-government" approach to "protect consumers, financial stability, national security, and address climate risks,” while ensuring U.S. leadership and competitiveness in the booming digital asset ecosystem.
The signing of this executive order is a watershed moment for blockchain and digital assets, signaling official recognition of the importance of the technology to U.S. national interests, strategy, and global competitiveness. A statement released by NEC Director Brian Deese and National Security Advisor Jack Sullivan stated that the order marked the "intensification of [U.S.] efforts to promote responsible innovation in the digital assets space."
See: Updated Report: Regulation of Cryptocurrency Around the World (Nov 2021)
After nearly a decade of building, evolving, and scaling, the executive order is a major step for the industry in receiving official recognition from the highest level of government in the U.S. The GBBC would like to thank the many leaders, innovators, and advocates who have worked tirelessly to bring the industry to this point and who will continue to innovate as we collectively seek to grow the business of blockchain to create more secure, equitable, and functional societies.
The order lays out several objectives and directives but does not go as far as to announce additional policies, regulations, or positions government agencies should take.
Summary of objectives laid out in the order:
- Protect consumers, investors, and businesses
- Ensuring “safeguards are in place and promot[ing] the responsible development of digital assets.”
- Protect the U.S. and global financial stability
- “Digital asset issuers, exchanges and trading platforms, and intermediaries whose activities may increase risks to financial stability, should, as appropriate, be subject to and in compliance with regulatory and supervisory standards that govern traditional market infrastructures and financial firms.”
- Mitigate illicit finance and national security risks
- Ensure "appropriate controls and accountability for current and future digital assets systems to promote high standards for transparency, privacy, and security — including through regulatory, governance, and technological measures — that counter illicit activities and preserve or enhance the efficacy of our national security tools."
See: US Government Accountability Office Urges Crypto Regulations to Counter Human Trafficking and Drug Cartels
- Reinforce U.S. leadership in the global financial system
- “The United States has an interest in ensuring that it remains at the forefront of responsible development and design of digital assets and the technology that underpins new forms of payments and capital flows in the international financial system, particularly in setting standards that promote: democratic values; the rule of law; privacy; the protection of consumers, investors, and businesses; and interoperability with digital platforms, legacy architecture, and international payment systems.”
- Promote access to safe and affordable financial services
- “The United States has a strong interest in promoting responsible innovation that expands equitable access to financial services, particularly for those Americans underserved by the traditional banking system, including by making investments and domestic and cross-border funds transfers and payments cheaper, faster, and safer, and by promoting greater and more cost-efficient access to financial products and services”
- Support technological advances that promote responsible development and use of digital assets
- Digital asset technologies and ecosystems should include privacy and security in their architecture and reduce negative climate impacts and environmental pollution that occurs from crypto mining.
- Investigation of a U.S. CBDC
- Placing “the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC.”
Continue to view analysis --> 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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What the BitMEX Decision Means for Crypto Exchanges Operating in the United States
Cozen O'Connor via Mondaq | Kara L. Kapp | March 4, 2022
This has been a blockbuster week for cryptocurrency enforcement actions in the United States against cryptocurrency exchanges. To cover just two of the major developments that occurred in the past week, two co-founders of a cryptocurrency exchange, BitMEX, Arthur Hayes and Benjamin Delo, pled guilty to violating the Bank Secrecy Act (the BSA) by failing to implement and maintain an anti-money laundering (AML) program. Shortly thereafter, the court overseeing the BitMEX prosecution denied a motion to dismiss the indictment against Samuel Reed, a third co-founder of BitMEX.
See: U.S. Justice Department Sets Up National Cryptocurrency Enforcement Team
This alert breaks down the decision in detail below, but for the busy reader, here are key takeaways from this decision:
- If a cryptocurrency exchange lists digital assets that require registration with the U.S. Securities and Exchange Commission (SEC), that does not preclude the possibility that the exchange may also need to register with the Commodity Futures Trading Commission (CFTC).
- The registration categories of the Commodity Exchange Act are not exclusive, and the fact that an exchange meets the qualifications to register under one category does not relieve the exchange of the obligation to register under all other applicable categories as well.
- The strictures of U.S. law cannot be safely avoided by implementing a geoblock if an exchange allows U.S. users to evade that geoblock by using a VPN or through other mechanisms known to the exchange.
- U.S. users known to exchange management must be actively and regularly removed by an exchange that wishes to avoid having to comply with U.S. laws and regulations.
- Where an exchange knowingly allows at least some U.S. users to access its platform, it should anticipate that it will be required to comply with U.S. laws and regulations.
- The failure to register with the CFTC and follow AML requirements, where required, can result in up to five years imprisonment, and the Department of Justice has signaled through the BitMEX indictment its willingness to enforce such penalties.
See:
A Tsunami of Regulatory Change Overwhelms Organizations
US Government Accountability Office Urges Crypto Regulations to Counter Human Trafficking and Drug Cartels
Crazy Rich Bitcoin Gold Rush: Rise (and Fall) of BTC Billionaire Arthur Hayes
The BitMEX decision is thus a significant one for all cryptocurrency exchanges that operate in the United States. Most importantly, it serves as a caution to all such exchanges that they should engage in a careful evaluation of their registration obligations under the CEA and U.S. securities laws, as well as their potential obligations to comply with the BSA's AML requirements.
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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IIROC to continue Client-Focused Reforms review with focus on KYC and suitability
Investment Executive | Michelle Schriver |March 10, 2022
Dealers must prepare for ongoing CFR reviews and expiring pandemic exemptions, priorities report says
The Investment Industry Regulatory Organization of Canada (IIROC) is prioritizing reviews related to the client-focused reforms (CFR) and service at order-execution-only firms as it prepares for consolidation with the Mutual Fund Dealers Association of Canada.
See: Sep 23, 2021: CSA and IIROC Issue Joint Guidance (Staff Notice 21-330) for Crypto-Trading Platforms Related to Advertising and Social Media
Regarding the CFRs and misleading communications and titles, client-facing registrants aren’t supposed to use corporate officer titles unless they legally hold such positions. When reviewing the use of a corporate title, IIROC said it will assess such things as a registrant’s functions and responsibilities to ensure they align with the title. The report also notes that IIROC updated its exam processes to assess dealer compliance with collecting information from clients on trusted contact persons and placing temporary holds on client accounts in cases of mental incapacity or financial exploitation.
“As retail investors become increasingly reliant on automated online services, we are considering the extent to which failures in the provision of such services should be considered an investor protection issue,” the report says.
See: Jockeying Crypto firms spark advertising bonanza at this years superbowl
In the coming year, IIROC will also focus on how OEO firms interact with social media platforms and use them for advertising. The concern is that online activity can include inaccurate information, possibly to manipulate markets.
“Dealers are reminded that existing IIROC rules and guidance pertaining to advertising and conflict of interest management continue to apply regardless of the communication technology that is being used,” the report says.
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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Fraud Prevention Month: CSA encourages Canadians to ask questions before investing in crypto assets
CSA | March 11, 2022
The CSA is launching a bilingual campaign on TikTok that encourages Canadian investors to ask themselves a series of questions to ensure an investment is right for them and to avoid investment fraud.
Louis Morisset, CSA Chair and President and CEO of the Autorité des marches financiers:
“The crypto landscape is evolving and complex. Fraudsters capitalize on market interest as well as a lack of knowledge in crypto assets to lure both sophisticated and potential investors into scams that can lead to devastating losses.”
“Asking questions, conducting research about potential crypto opportunities, and making sure you deal with registered platforms are among the best ways to protect yourself from potentially fraudulent investment activities.”
See: Gun-shy advisors struggle to provide clients with crypto guidance
Questions to ask before making a crypto asset investment include:
- Does investing in this crypto asset align with my financial goals and time horizon?
- Do I understand what I am investing in?
- Can I afford to lose the money I’m willing to invest in crypto assets?
- Am I investing for the wrong reasons, such as fear of missing out, urgency from others, promises of guaranteed returns, exclusive offers and, supposed cutting-edge investment opportunities?
- Have I considered the high-risk nature of investing in crypto assets and whether it fits my investor profile?
- Is the crypto asset I am considering deemed a security or derivative and subject to securities law?
- Does the crypto asset trading platform I plan to use hold custody of my crypto assets? Is it registered to do so?
Across Canada, CSA members are also running initiatives to highlight the importance of researching investments, checking registration through the CSA’s National Registration Search and being familiar with the red flags of fraud before investing their money.
View the full press release --> 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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Biden’s executive order on crypto leaked – prices surge
Forbes | | March 9, 2022
Cryptocurrency figures praised the ‘constructive approach’ that focuses on innovation rather than strict regulation
The US government has accidentally leaked its plans for cryptocurrency a day before it was set to make an official announcement, according to reports.
For the first time in US history, President Joe Biden was going to release an executive order on cryptocurrency and how it will be regulated in the US on March 9 local time (later tonight on Australian time).
Crypto enthusiasts have been waiting with bated breath, with rumours for months that regulations were headed for the industry which has a market capitalisation of US$1.76 trillion (A$2.42t) at time of writing.
See: Top Crypto Lawyer says Don’t wait for the SEC
However, just past 1pm AEDT, an official press release about the executive order from US Treasury Secretary Janet Yellen appeared online before being quickly taken down, CoinDesk reported.
"A presidential executive order on cryptocurrencies would 'support responsible innovation' as it coordinates U.S. policy across agencies," Treasury secretary Janet Yellen wrote in a statement that was briefly published on Tuesday evening before being removed but not before being spotted by Coindesk reporters. The webpage now reads: "Access denied—You are not authorized to access this page."
Cameron Winklevoss, the co-founder of the New York-based Gemini crypto exchange, said via Twitter"
"Based on remarks, crypto [executive order] is positive and calls for coordinated and comprehensive approach to digital asset policy that will support responsible innovation"
See: Canadian Regulators Bringing the Canadian Crypto Sector to Heel
"Under the executive order, Treasury will partner with interagency colleagues to produce a report on the future of money and payment systems," Yellen's now removed statement read. "Because the questions raised by digital assets often have important cross-border dimensions, we'll work with our international partners to promote robust standards and a level playing field."
Continue to the full article --> here
You can view an archived copy of the release --> 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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To stop Russia evading Ukraine war sanctions Joe Biden to sign an executive order on crypto (this week)
ComplianceX | Jack Kelly | March 8, 2022
US president Joe Biden is expected to sign an executive order on cryptocurrency this week that will mark the first step toward regulating how digital currency is traded.
The move comes as administration officials have raised concerns in recent weeks about Russia’s use of cryptocurrency to evade the impact of crushing sanctions in response to its invasion of Ukraine. The sanctions have sent the rouble to historic lows and have closed the country’s stock market.
Two people familiar with the process said the executive order on cryptocurrency was expected to be issued this week and it had been in the works long before the war. Both people spoke to the Associated Press on condition of anonymity to preview the order.
See: Over 400 SEC new enforcements in 2021 including Crypto, Dark Web, DeFi targets
The order is expected to describe what government agencies, including the US Treasury Department, need to do to develop policies and regulations on digital currencies. It is expected to include a request for the State Department to ensure that American cryptocurrency laws are aligned with those of US allies and will ask the Financial Stability Oversight Council — which monitors the stability of the US financial system — to study illicit finance concerns.
Additionally, the order will explore the possibility of a new central bank digital currency. The Federal Reserve issued a paper on the topic in January that explores the risks and benefits of US-backed digital currency.
Stopping Russia from evading sanctions
While US officials have played down the significance of cryptocurrency to Russia’s ability to evade sanctions, it remains a concern.
See: SEC Considering 50 Rule Changes: “One of the largest regulatory agendas in years”
US Treasury Secretary Janet Yellen said last week:
“We will continue to look at how the sanctions work and evaluate whether or not there are liquid leakages and we have the possibility to address them. I often hear cryptocurrency mentioned and that is a channel to be watched.”
A senior administration official who spoke on condition of anonymity said the president’s national security team has already been on the lookout for the use and creation of front companies and alternative financial institutions that Moscow might try to employ to get around sanctions.
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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Canada: Release Of Draft Tax Legislation For Consultation including GST/HST for Crypto Mining
Miller Thomson LLP | Feb 21, 2022
An extensive package of draft legislative proposals was released for public comment by the Department of Finance on February 4, 2022 (the "Proposals") along with explanatory notes (the "Notes"). The Proposals include some, but not all, of the measures announced or carried over in the 2021 federal budget and prior budgets.
This update provides an overview of a selection of the Proposal's measures to amend the Income Tax Act (Canada) (the "Tax Act") and the Excise Tax Act (Canada) (the "ETA") that may be of interest to our clients, but is not exhaustive. The Proposals outlined in this update include those in respect of:
- Limitations on the Deduction of Excessive Interest and Financing Expenses
- Mandatory Disclosure Rules for Reportable Transactions, Notifiable Transactions and Uncertain Tax Positions
- Avoidance of Tax Debts
- GST/HST and Mining Cryptocurrency
GST/HST and mining cryptocurrency
The Proposals include the addition of new section 188.2 to the ETA which addresses the GST/HST treatment of "mining activities" with respect to "cryptoassets" and to remuneration received for performing mining activities. Currently, the ETA only addresses the supply of a virtual payment instrument, such as Bitcoin, which is treated as the supply of a financial instrument and not subject to GST/HST.
See:
Crypto-tax primer in Canada
UK: Tax Regulator Updates Staking and DeFi Lending Guidance
Proposed section 188.2 of the ETA adds three new definitions: (a) "cryptoasset," which is broadly defined and includes, but is not limited to, a virtual payment instrument; (b) "mining activities," which describes three categories of activities; and (c) "mining group operator." Generally, these new provisions deem "mining activities" to not be a supply for GST/HST purposes. This means that businesses engaged in these activities will not be required to charge GST/HST. However, they are also limited in their ability to claim input tax credits in respect of property or services used, consumed or supplied in the course of these activities. Further, these new provisions address the GST/HST treatment of remuneration paid for mining activities that is paid by way of property or service (and not, for example, fiat currency).
If passed, new section 188.2 of the ETA is deemed to come into force on February 5, 2022, with limited grandfathering. The Minister of Finance will accept submissions with respect to these draft provisions until April 5, 2022.
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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