Russia’s central bank said in a report on Thursday that crypto bears the hallmarks of a pyramid scheme and undermines the sovereignty of monetary policy.
Overview
The question for DeFi regulation: Is there an "owner" of the platform who can be held accountable for complying with the regulations?
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
Gensler Speech Addresses Dynamic Regulation And Market Modernization
Cadwalader | Steven D. Lofchie | Jan 24, 2022
SEC Chair Gary Gensler urged regulators to update policy and monitor economic changes as part of a dynamic approach to regulation.
In prepared remarks before the Exchequer Club of Washington, D.C., Mr. Gensler highlighted two principles important to dynamic regulation: efficiency in capital markets and rules modernization.
On capital markets efficiency, Mr. Gensler noted the SEC's role in promoting fair markets by lowering the costs of financial intermediation. He encouraged greater competition and transparency as key pillars of efficiency, and directed SEC staff to foster competition and transparency throughout the financial sector. Mr. Gensler hoped this focus on transparency and competition would help both issuers and investors.
See: Gensler’s Updated Regulatory Agenda Critized by SEC Commissioners Peirce and Roisman (Exempt Securities)
With regard to modernization, Mr. Gensler described the SEC's history of adapting to emergent technologies and emphasized the need for more dynamic regulation. While acknowledging cryptocurrency as one area of technological advancement, Mr. Gensler focused on artificial intelligence and predictive data analytics as potentially revolutionary developments for the SEC to watch closely in the coming decade. He also pointed to non-technological developments, such as special-purpose acquisition companies and direct listings, as important areas for the SEC's consideration.
Mr. Gensler addressed public speculation on the timeline of new SEC rules publication by focusing on flexibility and "getting proposals right" rather than trying to prioritize any one area over another.
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View the full Gensler speech --> 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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Crypto.com $34 million stolen in user account hack | Data Breach Lessons
AIThority | | Jan 24, 2022
Crypto.com is the latest victim of a data hack incident that may have well jeopardized cryptocurrencies worth over $30 million from 400+ user accounts. What’s worse, the reputation of this company could be permanently tarnished due to this incident! It’s true that crypto companies are among the worst-affected digital companies as reported in our data breach updates.
See: Security advice for emerging tech companies and investors
Last week, Crypto.com’s CEO Kris Marszalek admitted in an interview that some of the security layers were breached resulting in loss of data of 400+ users. While the CEO acknowledged that the leak was controlled within 13-14 hours, users could well have lost over $30 million in Bitcoin and Ethereum after a hack that took place on Jan. 17, 2022.
JUST IN: CEO @cryptocom’s Kris Marszalek discusses the site's recent hack with @BloombergTV’s @emilychangtv. "Customer funds were never at risk." #TheYearAhead pic.twitter.com/YlCtGO60t5
— Bloomberg Live (@BloombergLive) January 19, 2022
Continue to the full article and DATA BREACH lessons --> here
City A.M. | Lily Russell-Jones | Jan 20, 2022
Crypto.com admits $34m stolen from user accounts in hack
Trading platform Crypto.com has admitted that $34m (£24.9m) was stolen from user accounts by a hacker.
The hack affected 483 customer accounts which were later compensated by the exchange platform, according to an update published today. Crypto.com said that unauthorised withdrawals totalled 4836.26 ether ($15.2m), 443.93 bitcoin ($18.7m) and $66,200 in US dollars.
See: Crypto fraud and breaches on pace to exceed $3 billion in 2021
In response to the theft the crypto exchange has rolled out a Worldwide Account Protection Program (WAPP) in order to insure customer investments up to a limit of $250,000.
“While we are reminded of the existence of bad actors intent on committing fraud, this new Worldwide Account Protection Program, along with our new MFA infrastructure, gives our users unprecedented protection of their funds, and hopefully, peace of mind,” he added.
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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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Russia proposes blanket ban on crypto mining and trading – undermines sovereignty of monetary policy
Aljazeera via Bloomberg | | Jan 20, 2022
Russia’s central bank said in a report on Thursday that crypto bears the hallmarks of a pyramid scheme and undermines the sovereignty of monetary policy.
Russia’s central bank proposed a blanket ban on the use and creation of all cryptocurrencies within one of the world’s biggest crypto-mining nations, citing the dangers posed to the country’s financial system and environment.
Crypto bears the hallmarks of a pyramid scheme and undermines the sovereignty of monetary policy, the central bank said in a report Thursday. It also took aim at mining, which it said hurts the country’s green agenda, jeopardizes Russia’s energy supply and amplifies the negative effects of the spread of cryptocurrencies, creating incentives for circumventing attempts at regulation.
“Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia,” the central bank said.
See: Landmark Jury Verdict Finds Digital-Asset Products Linked to Cryptocurrency Mining Are Not Securities
Russia already bans the use of crypto to make payments and the central bank in December prohibited mutual funds from investing in it. Thursday’s report called for individuals and businesses that flaunt the rules to be held to account, citing estimates that put Russian’s crypto trading turnover at about $5 billion a year.
Proposals would not apply to assets held abroad by Russians, Elizaveta Danilova, the central bank’s financial stability department head, said at an online briefing Thursday, adding that people with offshore exchange accounts will be able to trade crypto. While any ban would first need to be passed into law before taking effect, speaker of the lower house of parliament Vyacheslav Volodin said this week that creating a regulatory framework will be a priority in the State Duma’s spring session.
“We hope that this proposal will be discussed with the industry,” co-founder of BitCluster Vitaliy Borschenko said by phone. “The central bank’s main concern is that cryptocurrency won’t be traded in Russia and crypto mining poses no risks in this regard.”
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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US Government Accountability Office Urges Crypto Regulations to Counter Human Trafficking and Drug Cartels
Mayer & Brown |Sean P. McDonnell and Gina M. Parlovecchio | Jan 13, 2022
Overview
- On January 10, 2022, the US Government Accountability Office (“GAO”) issued an 84-page report warning of the role that virtual currencies continue to play in human and drug trafficking and urging tighter regulation of certain kinds of virtual currency transactions.
- The report specifically identifies gaps in registration requirements for virtual currency kiosks—commonly described as “Crypto ATMs”—that may hamper law enforcement’s ability to investigate money laundering, drug and human trafficking and other criminal activity.
See: SEC Regulation: Constructing a Crypto Regulatory Framework – New Tech, Old Rules
- To address this issue, GAO recommends that the Financial Crimes Enforcement Network (FinCEN) and Internal Revenue Service (IRS) review the existing registration requirements applicable to virtual currency kiosks and begin to require additional data from registered kiosk operators.
- Given GAO’s role as a key federal watchdog agency, its report is likely to further bolster ongoing efforts by the Biden administration and the US Treasury Department to implement more stringent regulations of virtual currencies across a variety of settings.
- Clients who are operating or considering operating money services businesses that facilitate virtual currency transactions should be building compliance programs and enhancing internal controls now to anticipate and prepare for increased regulatory and law enforcement scrutiny.
Looking forward
Based on the foregoing, we anticipate that FinCEN, IRS and other components of the US Treasury Department will continue to ramp up regulatory scrutiny of virtual currency exchanges and kiosk operators, including by strengthening existing MSB registration requirements. We also expect federal law enforcement agencies will devote increasing amounts of resources to examining those operators that they perceive to be skirting the rules.
See: US House Committee on Financial Services Provides Insight into Regulatory Needs of Crypto Industry
Indeed, the DOJ has already begun to criminally charge unlicensed operators of virtual currency kiosks who fail to meet FinCEN and US Treasury’s registration and reporting requirements. Clients who are operating or considering operating MSBs that facilitate virtual currency transactions should be building compliance programs and enhancing internal controls now to anticipate and prepare for this increased regulatory and law enforcement scrutiny.
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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A European approach to DeFi regulation
Cointelegraph | Thibault Verbiest | Jan 22, 2022
The question for DeFi regulation: Is there an "owner" of the platform who can be held accountable for complying with the regulations?
The great particularity of DeFi protocols is that there is no centralized institution in charge of verifying and carrying out the transactions. All transactions are performed on the blockchain and are irreversible. Smart contracts replace the intermediary role of centralized financial institutions. The code of DeFi applications is open source, which allows users to verify the protocols, build on them and make copies.
The FATF "test": Truly decentralized?
As of Oct. 28, 2021, the Financial Action Task Force (FATF) issued its latest guidance on digital assets. This international organization sought to define rules for identifying responsible actors in DeFi projects by proposing a test to determine whether DeFi operators should be subject to the Virtual Asset Service Provider or "VASP" regime. This regime imposes, among other things, Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) obligations.
See: Rise of Regulatory Compliant DeFi Protocols
FATF, under the new "owner/operator" test, states that indicia of control include exercising control over the project or maintaining an ongoing relationship with users.
Application of security law?
We know that the approach is very different in the United States where the Securities Exchange Commission (by applying the famous "Howey Test") qualifies tokens as securities that would be seen as digital assets in Europe. Their approach is, therefore, more severe, and this will certainly result in more prosecutions of "owners" of DeFi platforms in the U.S. than in Europe.
See: Central bank institution, BIS, says ‘The decentralization in DeFi just an illusion’
Thus, if DeFi services do not involve digital assets, but tokenized financial securities as defined by the European Markets in Financial Instruments Directive (MiFID Directive), the rules for investment services providers (ISPs) will have to be applied. In Europe, this will be a rare case as the tokens traded would have to be actual financial securities (company shares, debt or investment fund units).
The MiCA regulation
On November 24, the European Council decided its position on the "Regulation on Cryptoasset Markets" (MiCA), before submitting it to the European Parliament. It is expected that this fundamental text for the cryptosphere will be adopted by the end of 2022 (if all goes well...).
See: Decentralized Finance—Risks, Regulation, and the Road Ahead
We should think about a legal system that takes into account the automated and decentralized nature of systems based on blockchain, so as not to impose obligations on operators who do not have the material possibility of respecting them or who run the risk of hindering innovation by removing the reason for progress: decentralization.
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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GBBC Blockchain Central Davos Virtual Event Jan 18-19: On Demand Recordings
GBBC | Jan 19, 2022
Day 1: Jan 18
See: Can Blockchain Solutions Unlock Capital to Fix Our Planet?
Day 2: Jan 19
Download the 2 day virtual agenda --> 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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UK Law Society: Blockchain legal and regulatory guidance (second edition)
UK Law Society | Jan 11, 2022
We’ve published the second edition of our blockchain report, in collaboration with the Tech London Advocates (TLA) Blockchain Legal and Regulatory Group.
Who wrote the report?
The TLA Blockchain Legal and Regulatory Group put together the second edition of the blockchain legal and regulatory guidance.
TLA's dedicated blockchain working group was founded in 2018 and serves as a hub for multi-disciplinary DLT experts.
For the 2022 guidance, we’ve heard from experts including the law commissioner for commercial and common law, Professor Sarah Green, and Alessandro Palombo, CEO of Jur.
See: Blockchain Vulnerabilities, Forensics And Legal Challenges
A full list of experts who have addressed and fed into the group’s work is set out at annex two of the report.
What’s in the report?
The guidance covers a range of key issues for legal practitioners to be aware of when advising on DLT-related matters.
The report is divided into two parts:
Continue to the full article --> here
Download the 236 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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