Category Archives: Research

Canadian Online Gambling Regulations: Documents & Gambling Laws in Canada

Feb 21, 2024

Pixabay Gambling laws in Canada

Image: Pixabay

75% of Canadians are involved in some form of gambling, with lotteries (45%) reigning supreme. Sports betting (12%) while casinos (26%) follow closely behind. Males of the 45-64 age group of Canada participate more in gambling. Low-income individuals gamble more and face greater risks of problem wagering. 65% of Canadians over 18 have gambled in past years.

  • In 2018, sports betting accounted for 7.9% of gambling activities in Canada. Both genders enjoyed online gaming machines equally (12% male, 13% female).
  • Non-regulated sports betting dominated in 2019, capturing 57% of revenue. Only 2% of Canadians over 15 struggle with gambling addiction.
  • Canada's gambling market shrunk to $12.54 billion in 2021.
  • There is a list of rules and offline or online gambling laws in Canada that regulate activities on the casino market.
  • Online casinos boasted a high 97% win rate in 2022.
  • User penetration in the Canadian online gambling market soared 47% in 2023. It is expected to keep growing.
  • There are fines and penalties for non-compliance with Canadian online gambling laws.

Canada’s wagering license signifies adherence to local security standards set by authorities. 61% of sports betting online is unregulated, while 39% is done through land-based establishments. Imbalance is set to shift as Canada legalizes single-game betting, embracing iGaming. Provinces like Ontario lead the charge, establishing regulatory frameworks to attract the gambling market.

📌Key Takeaways

Is online gambling legal in Canada? Offline and online gambling activities in Canada are regulated and authorized exclusively under the supervision of provincial governments.
Provinces & Territories of Canada British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Labrador, Yukon, Northwest Territories, and Nunavut.
Key gambling law in Canada The Criminal Code of Canada
Best online casinos in Canada Jackpot City, Spin Casino, BitStarz Casino, MagicRed with free spins, no deposit bonuses. etc.
Legal gambling age in Ontario 19 Y.O
Average legal gambling age In Canada 18-19 Y.O

The Criminal Code

The Criminal Code of Canada (Code) - is a federal statute, among the main Canadian online gambling laws and regulations, encompassing definitions for the majority of criminal offenses enacted by the Parliament of Canada. It provides a legal framework for offline and online gambling in Canada, setting exceptions. Part VII outlines these restrictions, but Section 207 allows for exceptions managed by provinces. The Federal Criminal Code sets national rules for illegal activities, while provinces regulate gambling. Canada's gambling laws ban gambling establishments but allow exceptions for provincially-run activities under the Criminal Code established in 1985. Companies looking to operate in Canada should understand local regulations.

Is Online Gambling Legal in Canada?

Offline and online gambling in Canada is a controlled endeavor permitted solely under the management of provincial governments. The BC Lottery Corporation oversees and administers all forms of commercial gambling, including online gambling, within the province on behalf of the government of British Columbia. Online gambling legal in Canada only when provincially managed. The Criminal Code prohibits unlicensed gambling. Each province has its own online gambling laws in Canada & legal age (18 or 19). To open a casino, local regulations vary, and one must follow provincial laws for compliance.

Canada Province Is Canadian Online Gambling is Legal? Age Requirement
Alberta Legal on provincially regulated sites & licensed offshore casinos. 18
British Columbia Allowed on BC-regulated. It is not strictly illegal on offshore sites. 19
Manitoba Legal on provincially licensed sites. There is no prohibition on offshore gambling. 18
New Brunswick Legal through Atlantic Lottery Corporation. Allowed on offshore sites. 19
Newfoundland and Labrador Managed by ALC. Legal for ALC-offered games. Illegal if not offered by ALC. 19
Nova Scotia Legal online gambling in Canada for ALC-offered games. Online casino games launched in 2022. 19
Ontario Legal: Expanded laws in April 2022. Canadian online gambling on offshore sites is legal. 19
Prince Edward Island Legal through ALC. Allowed on offshore legal gambling sites in Canada. 19
Quebec Legal through Loto-Quebec. Gambling on offshore Canadian online gambling sites is permitted. 18
Saskatchewan Not illegal. No provincial online gambling services are yet allowed offshore. 19

Local Regulations: Online Gambling Laws in Canada

Canada's gambling is a patchwork of provincial regulations. The Federal Criminal Code sets broad parameters, like prohibiting illegal gambling establishments. Provinces set rules for online/offline casinos, empowered by the Criminal Code. Canada online gambling laws and regulations vary widely across the country, with some provinces adopting stricter approaches. The wagering game differs depending on where gamblers play in Canada.

Province/Territory Regulatory Body Key Gambling Laws in Canada
Alberta Alberta Gaming, Liquor & Cannabis Commission (AGLC) Gaming, Liquor & Cannabis Act
British Columbia British Columbia Lottery Corporation (BCLC) Gaming Control Act
Manitoba Liquor, Gaming & Cannabis Control Authority of Manitoba Liquor, Gaming and Cannabis Control Act, Manitoba Liquor & Lotteries Corporation Act
New Brunswick New Brunswick Lotteries & Gaming Corporation (NBLGC) Gaming Control Act
Newfoundland & Labrador Newfoundland & Labrador Liquor Corporation (NLC) Various regulations under the Liquor Control Act
Northwest Territories Department of Municipal & Community Affairs Lotteries Act
Nova Scotia Alcohol, Gaming, Fuel & Tobacco Division (Service Nova Scotia) Gaming Control Act
Nunavut Nunavut Liquor Commission Various regulations under the Liquor Act
Ontario Alcohol and Gaming Commission of Ontario (AGCO) Gaming Control Act, 1992, Ontario Lottery and Gaming Corporation Act, 1999
Prince Edward Island Prince Edward Island Lotteries Commission Lotteries Act
Québec Loto-Québec Act, respecting the Société des Loteries du Québec, Act, respecting Lotteries, Publicity Contests, and Amusement Machines
Saskatchewan Saskatchewan Liquor & Gaming Authority (SLGA) Alcohol and Gaming Regulation Act, 1997, Saskatchewan Gaming Corporation Act
Yukon Yukon Liquor Corporation Lottery Licensing Act

Alberta

Canadian online gambling law in Alberta is the Alberta Gaming, Liquor, and Cannabis Commission plus regulated under the Gaming, Liquor, and Cannabis Act. Its vast territory offers diverse gambling options, but online choices are restricted. AGLC regulates offline online gambling activities in this province of Canada. 25 casinos, mostly charitable, operate across this province. Alberta Park, Northlands Park, and 15 other locations offer horse racing. Daily lotteries with 6,000+ video lottery terminals are available. Sports betting allows multi-event bets with a $250 daily limit.

British Columbia

The Gaming Policy and Enforcement Branch oversees gambling in BC under the Gaming Control Act of 2002. British Columbia's diverse gambling blended tradition and modernity for 30 years. BCLC's platform has reigned supreme since 2004 and offers sports bets plus casino games. 15 casinos across a province concentrated in Vancouver cater to locals as well as visitors. Fraser Down offers live wagers accomplished by 15+ off-track simulcast locations in Canada. A mainstay since 1985, BC lotteries bring in players with varied options.

Manitoba

Regarding gambling in Manitoba, Canada, Manitoba Liquor and Lotteries Corporation refers to the Liquor, Gaming and Cannabis Control Act and The Manitoba Liquor and Lotteries Corporation Act. It offers various gambling options but with some limitations. Government-run PlayNow provides limited casino games. International sites offer more options (unregulated). Land-based casinos are present in southern cities. It includes Winnipeg's 2 government casinos and 1st Nations-owned establishments. Video lottery terminals are also available. Sports betting is limited to multi-event wagers with a $250 daily limit in Manitoba, Canada.

New Brunswick

The Gaming Control Branch of the Department of Public Safety under the Gaming Control Act of 2008 established regulations for gambling within New Brunswick. New Brunswick has a small population but has many gambling options. There are no licensed operators yet, but regulated Canadian online gambling sites are accessible. Casino New Brunswick in Moncton is the only option for land-based. Live races in Fredericton and Saint John are accessible with off-track betting in Dieppe and Quispamsis. Lottery tickets are available at 900 retailers. Video lottery terminals are available across a province.

Newfoundland and Labrador

The Consumer Affairs Division, Consumer and Commercial Affairs Branch of Service, is the gambling regulatory body in Canada within Newfoundland and Labrador. This province, the primary residence for 90% of the province's population, offers multiple gambling options under Atlantic Lottery Corporation & Newfoundland Service regulation. No offline casinos and no legal online casinos are present within a province. International sites cater to residents, but online gambling Canada legality varies. A lottery is widely accessible, with over 1,000 retailers selling tickets plus 500 featuring video lottery terminals in Canada.

Nova Scotia

In Nova Scotia, The Alcohol, Gaming, Fuel and Tobacco Division of Service regulates all gambling activities based on the Gaming Control Act of 1994-1995 guidelines. Canada's smallest province has a big gambling community with many options governed by Nova Scotia Gaming Corporation (NSGC). Online gambling in Canada isn't available locally. Bettors explore globally regulated sportsbooks/casinos. The province has 2 government-operated land-based casinos in Halifax as well as Sydney. It boasts 3 horse racing tracks: Northside Downs, Truro Raceway, plus Inverness Raceway. Atlantic Lottery Corporation manages lotteries featuring 3,000+ video lottery terminals in retail locations.

Ontario

The Ontario Lottery and Gaming Corporation as other Canada online gambling laws regulates online gambling in Ontario, as outlined in the Gaming Control Act 1992. Ontario is a province licensing 3rd-party online casinos and sportsbooks. It has 70+ licenses issued since April 2022 to major international operators, all operated by iGaming Ontario. It offers 25 locations, including private, government, as well as charitable options. Residents access provincial and national lotteries through the Ontario Lottery & Gaming Corporation. According to online gambling Canada legalization, Ontario legal gambling age is 19 years old.

Prince Edward Island

The Prince Edward Island Lotteries Commission is the designated regulatory body, adhering to the principles of the Lotteries Commission Act. PEI offers fewer gambling options than other provinces. The Lotteries Commission oversees all gaming activities. Online casinos and sports betting are not presently licensed within Prince Edward Island. As a result, residents use operators licensed in other locations. Red Shores Racetrack, Charlottetown Driving Park, and Summerside Raceway are popular racing venues in the province. The Atlantic Lottery Corporation provides video lottery terminals at various retail locations across the island.

Quebec

Quebec Lottery Corporation regulates gambling in this province through the Act Respecting Lotteries, Publicity, Contests, and Amusement Machines. Gambling in Quebec is regulated by Loto-Quebec & RACJ. Residents play globally licensed online casinos/sportsbooks alongside a provincial offering, Espacejeux. Online gambling Canada legalization discussions are ongoing, with residents favoring it. 9 RACJ-regulated casinos offer in-person gambling experiences. Hippodrome 3R plus off-track betting establishments cater to horse racing enthusiasts. According to Canada online gambling laws, Quebec casino age is 18.

Saskatchewan

The Saskatchewan Liquor and Gaming Authority regulates gambling in Saskatchewan under the Alcohol and Gaming Regulation Act of 1997. Saskatchewan households gamble the most in Canada. The province's Liquor & Gaming Authority supervises all gambling, but online gambling in Canada is unlicensed, missing out on economic benefits. 8 casinos operate in a province, 6 under First Nations authority, plus 2 under government. 3 racetracks, off-track betting, 1000s of video machines, and lottery draws are offered regularly.

Yukon, Nunavut, and Northwest Territories

To ensure responsible gambling practices here, Yukon Liquor Corporation is responsible for the regulation outlined in the Lottery Licensing Act. Yukon offers several ways to gamble, including online, lottery, and casinos. Residents use licensed, 3rd-party casinos and sportsbooks, as online gambling within a province isn't supported. Yukon stands alone in banning fixed-location casinos. Diamond Tooth Gertie's operates seasonally. Daily/weekly draws are available through the Western Canada Lottery Association. Multi-market bets are accepted, but single-event wagers are prohibited.

Canadian Online Gambling Laws & Legalization

Canadians legally bet on individual sports games. Online access is available in 10 provinces plus 3 territories. It provides opportunities for top sportsbooks. US-legalized sports betting led to Canada's shift. Skeptics like pro leagues came around. The CFL and NHL now support regulated markets. Online gambling laws in Canada differ by province. Ontario leads the pack with a fully open market, while others offer limited options or stick to monopolies. Over 95% of Canadians who gambled in 2018 were non-problem gamblers, according to a 2018 CCHS-GAM report.

  • Legal - online & retail:  Prince Edward Island, Quebec,  Nova Scotia, Ontario, New Brunswick, Manitoba, Saskatchewan, British Columbia, Alberta, Newfoundland, & Labrador
  • Legal - retail only: Nunavut, Northwest Territories, Yukon

Key Bodies in Canada

Each jurisdiction in Canada sets its own rules for operator licensing, responsible gambling features, and taxes on earnings.

  1. The federal government: It provides broad guidelines.
  2. Provinces/territories: They have control through their gambling bodies.
  3. The Canadian Gaming Association: It promotes responsible practices & legal frameworks.

Since 2020, online gambling Canada legalized single-event sports betting and opened Ontario to commercial online gambling on April 4, 2022. Sports and online casino ads featuring celebrities reach Canadians, raising concerns about responsible gambling practices and informed consumer choices.

Canadian Online Gambling Regulations

The Canadian online gambling landscape differs by province, but essential themes emerge:

  • Licensing: Canadian operators need local approval from the relevant provincial authority.
  • Consumer protections: Age checks, responsible betting tools, and ad restrictions safeguard consumers.
  • Taxation: Operators in Canada pay taxes on their provincial earnings. It can be done in 3 ways: local model, common approach, and additional levies.

Types of Online Gambling Laws in Canada

Here are some key points to consider:

  • Federal Laws: The Criminal Code of Canada is a federal statute that addresses gambling laws. It allows provinces and territories to manage and conduct their own gambling operations, including online gambling.
  • Provincial and Territorial Regulations: Each province and territory has the authority to regulate and license online gambling within its borders. Some provinces, like British Columbia, Ontario, and Quebec, have their own online gambling websites. Others, like Alberta and Manitoba, allow private operators to offer online gambling services.
  • Kahnawake Gaming Commission: The Kahnawake Mohawk Territory, located in Quebec, operates the Kahnawake Gaming Commission. This commission licenses and regulates online gambling operators, providing services to players outside of Canada.
  • Grey Area for Offshore Operators: While it's illegal for online gambling operators to be based in Canada without proper licensing, Canadian residents can access and play on offshore gambling websites. The legal status of these offshore operators is ambiguous, and there is ongoing debate about whether they can be subject to Canadian laws.
  • Changes in Legislation: The landscape of online gambling laws in Canada is dynamic, and changes may occur. Governments may review and update regulations to address emerging issues or to adapt to changing attitudes toward online gambling.

Main Canadian Online Gambling Regulations & Licenses 

Online gambling licenses in Canada act as provincial permission slips for operators. Each province has its rules, demanding specific licenses for online sports betting, casino games, as well as lotteries. These licenses serve a double purpose: protecting players from illegal operators and ensuring industry's responsible growth. Operators must meet strict policies and agree to ongoing monitoring to guarantee fair play. Until recently, only government agencies held these licenses. But as of 2021-2022, international operators apply directly to provincial authorities. It allows for wider participation in the Canadian online gambling market.

  • Manitoba Liquor and Gaming Authority of Manitoba | 1970. Issues licenses for casinos, charitable gaming, video lottery terminals, and online gambling in Canada.
  • British Columbia – The Gaming Policy & Enforcement Branch (GPEB) | 2002. Responsible for regulation of gaming in British Columbia. It includes community gaming centers, casinos, and online gambling.
  • Alberta Gaming and Liquor Commission | 1974. Regulates casinos, offers video lottery terminals and provides online gambling for Canadians in Alberta.
  • Alcohol and Gaming Commission of Ontario | 2019. Controls alcohol and activities, as gambling laws in Ontario. Promotes responsible gambling and alcohol consumption.
  • Québec Gambling Commission Link and Kahnawake Gaming Commission | 1970. Manages and regulates alcohol, horse racing, and Quebec online gambling laws. It includes video lottery terminals, casinos, and online betting.
  • Newfoundland and Labrador – Atlantic Lottery Corporation (ALC) | 1976. A Crown corporation that operates video lottery terminals, provincial lotteries, and online wagering in Newfoundland & Labrador.
  • Prince Edward Island Gambling | 1985. Operates provincial lotteries and video lottery terminals in Prince Edward Island, Canada.
  • New Brunswick Lotteries and Gaming Corporation | 1972. A Crown corporation that operates video lottery terminals, provincial lotteries, plus casinos in New Brunswick.
  • Saskatchewan Liquor and Gaming Authority (SLGA) | 1976. It operates casinos, online gambling, as well as video lottery terminals in Saskatchewan.
  • Alcohol and Gaming Authority Nova Scotia | 2018. Operates alcohol and gambling in Nova Scotia. It also includes casinos, video lottery terminals, and gaming poker.

Ontario’s Market: Offline & Online Gambling Laws in Ontario

Ontario dominates the iGaming market in North America. It generated $14 billion in wagers from 920,000 players in Q1 2023, generating $545 million in gaming revenue. This has earned the province the top position as the continent's leading earner. The market itself is experiencing rapid growth, with several licensed operators jumping from 24 to 47 in Q2 alone. Gamblers have access to 71 Canadian online gambling sites, compared to 42 last year. Active gamers in online & offline gambling in Canada accounts have also surged, growing from 628,000 to 943,000. Driving this boom is the recent legalization of single-game betting across Canada. Each province sets its regulations, with Ontario leading the charge towards a fully open iGaming market. iGaming Ontario Board, regulated by Alcohol and Gaming Commission of Ontario. It ensures responsible regulation within the sector.

Offline and online gambling laws in Ontario

  • Gaming Control Act, 1992: Sets out principles for regulating charitable games, slots, casinos, as well as online gaming (via iGaming Ontario). It empowers AGCO to regulate operators, set standards, and conduct investigations.
  • Ontario Lottery and Gaming Corporation Act, 1999: Establishes OLG as a province's sole legal lottery and gaming operator. Defines OLG's responsibilities for conducting casinos, lotteries, plus other gambling activities.
  • The Alcohol and Gaming Commission of Ontario (AGCO): Establishes a new online gaming market with private operators. Prioritises consumer protection. iGaming Ontario (iGO) collaborates with the government & AGCO.

Did Ontario legalize online gambling?

In April 2019, the Ontario government announced plans to establish a competitive online gambling market and to end the current online gambling monopoly operated by the Ontario Lottery and Gaming Corporation (OLG). The goal was to open up the market to private operators and provide a safer and more regulated environment for online gambling.

Prohibited Activities: Gambling that is Illegal in Canada

We have analyzed which online gambling is legal in Canada, but let's find out which ones are not? Operating an online casino within Canada's borders is strictly illegal. Pool-selling, online betting, and bookmaking fall under this restriction. Canadian Criminal Code, Section 202 prohibits any location from being used for recording and registering bets on any sport. Playing at unlicensed or offshore online casinos could suffer legal consequences. Gambling without a license is illegal. Choose legal and regulated options in Canada. Some games are illegal due to unfairness:

  • Three-card Monte: An online shell game that includes hidden cards & deception.
  • Punch boards: Misleading way with cards for concealed prizes.
  • Coin tables: Manipulates gamblers by manipulating coins on a table.
  • Pyramid schemes: Disguised as games but rely on recruitment for profit.

In Canada, online gambling was mostly illegal, leading to widespread black markets. It is primarily offline and online gambling legal in Canada now, with some arguing that regulation replaces these illicit operations. It collects revenue for society's benefit.

Consequences of Prohibited Gambling

  • Fines: Amount fluctuates depending on the offense and where gamblers are caught.
  • Jail time: Gamblers could end up behind bars in serious cases.
  • Asset seizure: Authorities remove any money or property in illegal gambling.

Legal Gambling Age In Canada According to Gambling Laws

According to offline and online gambling laws in Canada, the minimum legal age varies between 18 & 19. It depends on the province. This applies to both online and land-based casinos. Check local regulations before placing your bets. 2018, almost two-thirds (64.5%) of Canadians over 15 (around 18.9 million people) gambled at least once. 3 provinces have a lower minimum gambling age Canada of 18. These are Quebec, Alberta, and Manitoba. In most of Canada’s provinces, like British Columbia or Ontario, the minimum gambling age is 19. This applies to all forms of betting: land-based casinos; online casinos; online slots; lottery tickets; sports betting; horse racing.

Legal ages according to offline and online gambling laws in Canada
Canada Province Major cities Legal gambling age
Yukon Whitehorse 19
Saskatchewan Saskatoon, Regina 19
Quebec Quebec City, Ottawa, Montreal 18
Prince Edward Island Charlottetown 19
Ontario Toronto, Hamilton 19
Nunavut Iqaluit 19
Nova Scotia Halifax 19
Northwest Territories Yellowknife 19
Newfoundland and Labrador St. John’s 19
New Brunswick Moncton, Fredericton 19
Manitoba Winnipeg, Brandon 18
British Columbia Vancouver, Kelowna 19
Alberta Edmonton, Calgary 18

Online Gambling Laws in Canada According to Advertising: How is it regulated?

In Canada, the Broadcast Standards Council (BSC) holds advertising on traditional broadcast media, enforcing a Code of Ethics that restricts misleading or harmful ads. The Competition Act prohibits deceptive marketing practices and requires licensed operators to adhere to strict standards and prevent false claims. iGaming Ontario regulates Canadian online gambling ads, including age-gating and fair play measures. Influencers promoting online gambling must disclose partnerships and follow relevant ad rules. All social platforms should have policies for further restricting gambling content. Two federal bills propose significant changes: Bill S-268: Empowering First Nations to manage and license lotteries on their reserves. Bill S-269: Establishing a nationwide national framework for online sports betting advertising.Both bills are in the early stages. There is no timeline for future results. Provinces may follow Ontario's lead in opening online gambling to private operators. Alberta considers a similar model.

Tax Rate Rules: Canadian Online Gambling Laws

Offline and online gambling in Canada involves three key financial terms: corporate tax, gaming tax, and revenue share. Every company pays regular corporate tax, including operators, at a flat rate of 15%. Gaming tax is an extra tax specifically targeting profits from activities on top of regular corporate tax. Revenue share belongs to how profits are split among different parties. These are licensing authorities (like Ontario's AGCO) and operators. In Canada, online & offline operators skip a separate gaming tax. Share revenue with authorities like a licensing board. Pay regular corporate income tax at a standard rate. Small businesses, including some operators, follow provincial tax rates that start at 15% & increase with higher income. Tax rules and Canada online gambling laws vary by province in both online plus offline Canada’s casinos. Consult a professional for accurate information. See the table below for specific details.

Casino laws in Canada for Tax Rates
Canada Provinces General Provincial Tax Rates
Alberta 8%
Quebec 11.5%
Ontario 11.5%
Saskatchewan 12%
Manitoba 12%
British Columbia 12%
Nova Scotia 14%
New Brunswick 14%
Prince Edward Island 16%

In Ontario, Canada, operators receive confidential information about tax rates and revenue shares after signing an NDA. In other provinces, corporate tax rates are based on agreements with regulators and the products or services offered.

Information for Canadian Online Players

1) What are the age restrictions for online casino players?

Most provinces require gamblers to be 19 (like Ontario, British Columbia, and Saskatchewan). In Manitoba, Alberta, & Quebec, gamblers legally gamble at 18. According to Canada online gambling laws, before placing bets, double-check the local age limit. Always confirm legality before playing. Stick to regulated platforms for safety and security. OLG.ca remains a legal option for Ontario residents.

2) Is it legal to deposit and withdraw money according to Canada online gambling laws?

Yes. Online gambling is legal in Canada, generally. So, it is legal to deposit and withdraw money. A platform cannot be based within Canada. Look for internationally licensed or provincially regulated legal sites in Canada, like Ontario's iGaming market. Most Canadian banks allow deposits/withdrawals for legal online casinos. Legal Canadian online gambling is now available in Ontario from April 2022.

3) Do I need to pay tax on my winnings?

No. Canadian gambling winnings (sports bets, horse races, lotteries, etc.) are tax-free because of Paragraph 40(2)(F) of the Income Tax Act. Any interest earned on those winnings becomes taxable income. Pay taxes on dividends, too. Report this income on a T5 form or face fines. Gambling isn't considered a reliable income source.

4) What are the safest Canadian online casinos?

# Canada Casinos Security Rating Games Remarks
1 Spin Casino 4.6/5 1200+ Good for immersive live casino games
2 Leo Vegas 4.7/5 2000+ Perfect deposit bonus deal
3 ComeOn 4.7/5 450+ A great option for game variety
4 Royal Panda 4.8/5 2000+ Perfect for Jackpot games
5 Party Casino 4.8/5 1000+ Excellent slot selection
6 Royal Vegas 4.8/5 700+ Wonderful loyalty program
7 Ruby Fortune 4.8/5 500+ Customized casino experience
8 888 Casino 4.9/5 2000+ No deposit bonuses
9 JackpotCity 4.9/5 500+ Excellent user experience
10 Casumo 4.9/5 4400+ Top choice for fast payouts

5) What are the key governing casino laws in Canada for online players?

Playing at unlicensed online casinos within Canada is illegal. Offshore sites aren't prohibited but may not be subject to Canadian regulations or consumer protections. Gamblers should choose licensed legal gambling sites in Canada and be aware of the potential risks associated with offshore operators. The minimum age is 18 in Canada, and responsible gambling applies everywhere.

Canadian Online Gambling Laws & Regulation 2024

Over 70% of Canadians partake in some form of gambling annually. In 2002, 18.9 million Canadians gambled, with lotteries & occasional games leading the way. Recent surveys suggest participation between 75% & 85%, encompassing activities like charitable gambling and online poker. Participation varies by province, with Nova Scotia & Saskatchewan seeing higher rates. Running an online casino in Canada requires a license. To online gambling Canada legalaze, each province grants licenses with strict rules for operators. License isn't a guarantee of safety. It shows that an operator meets local security standards. Look for licenses from provincial gaming authorities for physical venues and reputable jurisdictions for online betting.

  • Alcohol and Gaming Commission of Ontario (AGCO)& iGaming Ontario
  • Kahnawake Gaming Commission (KGC)
  • Gaming Policy and Enforcement Branch (GPEB)&BC Lottery Commission
  • Alberta Gaming and Liquor Commission (AGLC)

Expected Key Regulatory Changes

The Canadian Gaming Association is revamping its strategy with short- & long-term goals. Collaboration, education, and advocacy will be key aspects of improving responsible gaming practices. New rules from AGCO restrict using celebrities or athletes in ads. These changes take effect in February 2024. Online gambling user penetration in Canada is projected to jump 51% by 2027. It will reach 20.38 million users. More Canadians are choosing online over physical venues. Online gamblers in Canada spend an average of $220 per user. With easy, the industry is raking in more money. It is expected to reach $3.3 billion US dollars annually by 2027.


NCFA Jan 2018 resizeThe 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, artificial intelligence, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

CBDCs in Canada and Impact Drivers on Banking Choices

Bank of Canada Report | Feb 20, 2024

Freepik blossomstar, CBDCs

Image: Freepik/blossomstar

Bank of Canada's Latest Staff Report on the Effects of a CBDC in Canada and Banking Choices

On Feb 8, 2024, the Bank of Canada's staff released a research paper titled "Central Bank Digital Currency (CBDC) and Banking Choices' to dig deeper into the potential impact of the BoC introducing a CBDC on the Canada's financial ecosystem.  This exploratory CBDC report uncovers the nuances between digital and traditional banking, presenting a unique opportunity for stakeholders to navigate through innovation, policy-making, and banking adaptation.

Research Insights:  Service Network, Holding Limits, Nuanced Impact

  • The success of a CBDC depends on how widely it can be used (its service network) and whether it offers features that complement existing financial products. If a CBDC doesn't offer something extra besides just being digital cash, it needs to be accepted in many places to truly compete with bank deposits.

See:  BoC: Redefining Financial Inclusion for CBDCs

  • Setting a cap on how much CBDC an individual can hold (i.e., holding limits) might prevent it from taking over traditional bank deposits. This approach aims to find a middle ground that encourages the use of CBDCs for everyday transactions without pushing people away from using bank services.
  • Different groups will feel the effects of a CBDC introduction differently. For instance, larger banks might face different challenges compared to smaller ones, and people living in rural areas might benefit differently from those in urban settings.

Potential Implications for Fintechs, Policymakers, and Banks

For fintechs, the report signals a clear need for developing robust service networks that can support CBDC transactions, emphasizing the importance of digital infrastructure in enhancing the user experience.

Policymakers are tasked with a delicate balance, crafting regulations that promote financial stability while accommodating the transformative potential of CBDCs. The introduction of holding limits on CBDCs emerges as a key strategy to prevent the displacement of bank deposits, ensuring a harmonious integration into the existing financial system.

See:  OMFIF Podcast: Smart Contracts and Retail CBDCs

Banks, both large and small, are urged to adapt, potentially adjusting deposit rates and services to stay competitive in a landscape that could see significant shifts in consumer preferences towards CBDCs. The report highlights the varied impacts of CBDC introduction, with implications varying across different market segments and geographical areas, underscoring the importance of tailored approaches to policy and banking strategy.

Predicting the Impact of a CBDC in Canada in years 1, 3 and 5?

Predicting the outcome of introducing a Central Bank Digital Currency (CBDC) by the Bank of Canada involves considering several factors, including technological adoption rates, regulatory developments, and market adaptation. Here's a theoretical and speculative outlook:

Year 1: Initial Rollout and Adaptation

  • Early adopters begin using the CBDC for transactions, with uptake primarily among tech-savvy consumers and businesses looking for efficient, low-cost payment methods.
  • Banks adjust their digital offerings to remain competitive, potentially integrating CBDC transactions into their digital platforms.
  • Policymakers and regulators closely monitor the CBDC's impact on financial stability, consumer protection, and privacy.

See:  Central Bank Digital Currencies on the Rise: 15 Retail CBDCs by 2030

Year 3: Expansion and Integration

  • CBDC adoption grows, supported by an expanding service network and enhanced by complementary financial products.
  • Banks may start offering new financial products tied to CBDC holdings or use CBDC transactions to streamline international payments and remittances.
  • Fintechs innovate around CBDC capabilities, creating new services that leverage the digital currency's features for both consumers and businesses.

Year 5: Maturity and Widespread Use

  • The CBDC becomes a standard payment method across Canada, widely used for a variety of transactions, from daily purchases to large, cross-border payments.
  • The financial ecosystem adapts, with CBDCs coexisting alongside traditional banking products, each serving distinct needs.
  • Policymakers continue to evolve the regulatory framework to ensure the financial system's integrity, adapting to new challenges and opportunities presented by widespread CBDC use.

See:  UK’s Digital Pound Initiative Sparks Privacy Discussions

This speculative timeline considers the gradual adoption and integration of a CBDC into Canada's financial landscape, emphasizing the collaborative effort among banks, fintechs, and policymakers to ensure a smooth transition and the realization of the potential benefits of digital currencies.

Conclusion

The Bank of Canada's 2024 report on CBDCs offers an examination of how a digital currency could reshape Canada's financial ecosystem. By highlighting the necessity for a broad service network and complementary financial products, setting strategic holding limits, and acknowledging the diverse impacts on various stakeholders, the report provides crucial insights for fintechs, policymakers, and banks.  As Canada contemplates the CBDC's future, its design and implementation and essential need to address key risks such as privacy, data security, financial stability, and digital divide are paramount.


NCFA Jan 2018 resizeThe 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, artificial intelligence, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Open Banking Insights: Decoding Canada’s Financial Future

Survey | Feb 20, 2024

Survey Abacus Data Feb 2024 Satisfcation with current banking system

Survey Abacus Data Feb 2024 Satisfaction with current banking system

Insights into Banking Satisfaction, Financial Literacy, and Readiness for Open Banking

A recent nationwide survey conducted by Abacus Data, encompassing 2,199 Canadians aged 18 and above, offers invaluable insights into the country's financial literacy, banking satisfaction, and the burgeoning interest in open banking. Below we break down and analyze each of the six survey findings and their implications for Canada's financial services sector.

1. Digital Literacy and FinTech Knowledge

  • 38% feel confident in their digital literacy.
  • 30% claim proficiency in financial literacy.
  • 15% demonstrate familiarity with financial technologies.
  • Younger Canadians (18-29 and 30-44) show higher levels of digital literacy (51% and 47%) and FinTech knowledge (23% and 21%) compared to older Canadians (60+), where only 25% exhibit digital literacy and 9% possess FinTech knowledge.

See:  Feds Promise Open Banking Laws in 2024 and to Broaden Access to Payments Canada

2. Banking Satisfaction

  • 72% are satisfied with their personal banking.
  • 70% trust their financial institution.
  • 69% feel their financial needs are being met.
  • 60% believe their institution delivers personalized services.
  • Younger Canadians report lower satisfaction and trust compared to older demographics.

3. Perceived Effectiveness of the Canadian Banking System

  • 51% believe the system adapts to changing customer needs.
  • 45% feel it addresses the financial concerns of the average Canadian.
  • 44% perceive it as open and transparent.
  • Only 27% agree that the system prioritizes customers’ best interests over profits.

4. Challenges in Canadian Banking

  • High fees (32%) and unfavorable interest rates (30%) are the top concerns.
  • 17% express frustrations over limited branch availability or hours.
  • 16% cite poor customer service and security concerns.
  • Younger Canadians face unique challenges such as limited operating hours and security apprehensions.

See:  Open Banking Regulation in the U.S. Strikes a Chord

5. Open Banking Awareness and Adoption

  • 57% of Canadians are unfamiliar with open banking.
  • 12% claim to be familiar with the concept.
  • Awareness is higher among younger Canadians (18-29: 17% aware; 30-44: 19% aware) and current users of online banking (24% aware).
  • 1 in 4 Canadians express likelihood in adopting open banking once familiar.

6. Customization and Personalization in Open Banking

  • 41% are willing to share data for real-time fraud detection.
  • 24% are interested in tailored loan offers.
  • 20% are intrigued by simplified loan approvals, personalized financial guidance, and automated savings options.
  • Interest in open banking benefits is limited, indicating a need for increased awareness and education.

Insights and Analysis

  • The survey results reveal a significant generational divide in digital and financial literacy, with younger Canadians being more adept and older Canadians showing lower levels of familiarity and confidence.
  • While overall satisfaction with banking is high, there are notable demographic differences and concerns about fees, interest rates, and the adaptability of the banking system to customer needs.

See:  BoE Report: Open Banking Boosts Productivity, Competition

  • Challenges such as high fees, unfavorable interest rates, and limited branch availability highlight areas for improvement in the banking sector.
  • There's a clear gap in open banking awareness and adoption, with potential interest once Canadians become more familiar with it.
  • The interest in customization and personalization through open banking suggests a pathway for financial institutions to offer more tailored services, although overall interest remains limited.

Outlook

Understanding Canada's financial pulse is more than just a glimpse into data; it's about recognizing the evolving needs and aspirations of Canadians across generations. This insight is crucial for shaping a financial ecosystem that is robust, transparent, inclusive and forward-thinking.

See:  DoF Consultation: Financial Competition in Canada

Collectively, it's imperative that we advocate for policies and practices that balance innovation with financial literacy and consumer protection. By doing so, we ensure that every Canadian is equipped to make informed financial decisions in modern times, fostering a culture of innovation, competition, and financial well-being that benefits all Canadians.


NCFA Jan 2018 resizeThe 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, artificial intelligence, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Citi’s PoC Success in Private Market Tokenization

Tokenization | Feb 16, 2024

Unsplash Joshua Lawrence, Citi

Image: Unsplash/Joshua Lawrence

Citi collaborates with Wellington Management and WisdomTree to explore the tokenization of private markets, aiming to revolutionize the $10 trillion sector

Feb 14, 2024:  Citi, in partnership with Wellington Management and WisdomTree, have successfully completed a proof of concept for the tokenization of private markets. This initiative, conducted on the Avalanche Spruce institutional test Subnet, aiming to use blockchain technology to gain operational efficiencies and new functionalities within the $10 trillion private markets sector, traditionally bogged down by complex and manual processes.

  • The collaboration tested the tokenization of a Wellington-issued private equity fund, demonstrating the potential of smart contracts to streamline operations compliantly.  The result of the experiment?   Smart-contracts could enable buy- and sell-side institutions to engage with distributed ledger infrastructure in a low-risk, regulatory-compliant manner, offering unprecedented operational efficiencies.

See:  Fund Tokenization: Fractional Issuance, Streamlined Redemption, and Servicing Benefits

  • By encoding fund distribution rules into smart contracts, the initiative promises greater automation and an enhanced compliance and control environment for issuers, distributors, and investors.
  • Citi's exploration into tokenization is not just theoretical; it includes practical scenarios of transfers using smart contracts, showcasing the feasibility of new operating models that could revolutionize the market.

Nisha Surendran, Emerging Solutions Lead for Citi Digital Assets:

"Smart contracts and blockchain technology can enable enhanced rule-enforcement at an infrastructure-level, allowing data and workflows to travel with the asset. We believe that by testing the tokenization of private assets, we are exploring the feasibility to open-up new operating models and create efficiencies for the broader market."

You may also link:

Swift’s Blockchain Breakthrough Boosts Global Tokenization

Real World Implementation of Real Estate Tokenization


NCFA Jan 2018 resizeThe 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, artificial intelligence, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

CVCA Publishes ‘The 50’, 3rd Guide to Canada’s VC Ecosystem

VC Funding | Feb 12, 2024

The 50 CVCAs 3rd Canadian VC Ecosystem report

The 50: A Guide to the Canadian Venture Capital Ecosystem - Third Edition Overview

The Canadian Venture Capital and Private Equity Association (CVCA) has proudly released the third edition of "The 50: A Guide to the Canadian Venture Capital Ecosystem."

This annual publication, created in partnership with the Trade Commissioner Service (TCS), serves as a comprehensive online guide to Canada's venture capital (VC) sector. It features profiles of over 50 leading VC firms that are shaping the future of innovation and investment in Canada.

See:  AI Metamorphosis in Venture Capital

"The 50" is not intended to rank the top 50 VC firms in Canada. Instead, consider it a guide.  It offers an immersive journey into the heart of Canada's entrepreneurial ecosystem, showcasing a diverse range of sectors, investment stages, and both established and emerging VC firms and managers.

Outlook

The guide serves as a strategic tool for anyone interested in understanding or engaging with Canada's venture capital ecosystem. Whether you're a foreign investor looking to explore Canadian VC opportunities, a local entrepreneur seeking funding, or simply interested in the latest trends in venture capital, this guide offers valuable insights and information.

Download the 55 page PDF report --> here


NCFA Jan 2018 resizeThe 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, artificial intelligence, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

A Fintech Survival Guide to Understanding Gen Z Finance

Education | Feb 8, 2024

Understanding Gen Z Finance:  A Fintech Survival Guide

As Generation Z (born between 1997 and 2012) steps into financial independence amidst economic challenges, their unique financial behaviors, preferences, and terminologies come to the forefront.

Understanding these aspects is crucial for fintech professionals aiming to engage, communicate, and develop services for this demographic effectively.

See:  Gen Z VCs are entrepreneurial, digitally native, values-focused

This guide aims to provide fintech professionals with insights into Gen Z's financial mindset and practical tips for engaging with this generation effectively. As Gen Z's influence grows, so does the importance of adapting fintech offerings to meet their expectations and needs.

Gen Z Finance Terms Explained

These Gen Z finance terms open up conversations about finances in a more relatable and less taboo manner.

  • Bougie / Boujee: Refers to someone with expensive, lavish tastes. It's about enjoying the finer things in life without shame.
  • Bread: A slang term for money, derived from the idea that bread is made of dough, which is another common slang term for money.
  • Cash Stuffing: Also known as the cash envelope method, this budgeting technique involves allocating specific cash amounts for different expenses. It has gained popularity on TikTok among Gen Z, though experts caution against having too much cash on hand.
  • Doom Spending: Similar to doom scrolling, doom spending involves spending money despite economic concerns, often as a way to cope with stress. A significant portion of Gen Z engages in this behavior, choosing to cherish purchases now instead of saving for an uncertain future.
  • Drip: Used to describe someone wearing expensive items or a nice outfit in general. It's about showcasing wealth or style through clothing and accessories.
  • Finesse: To trick someone into giving you something, often used in the context of acquiring money or benefits cleverly.
  • Flex: To show off possessions, knowledge, or other intangibles. It's about displaying one's success or wealth openly.
  • Free Money: A term that encompasses any monetary gain that doesn't affect one's current bank account balance, such as gifts, store credits, negative credit card balances, and cash back.

See:  Fintech Fridays EP55: Global Hiring Trends: How Gen Z Talent Thrives

  • Girl Math: A lighthearted concept among young women rationalizing spending through humorous comparisons, like considering a purchase "practically free" if it's under a certain amount.
  • Glo Up: When someone looks better or has a better lifestyle than before. It's about personal improvement and success.
  • Guap: Means a lot of money. It's used to describe having a significant amount of wealth.
  • Gucci: Derived from the high-end fashion brand, meaning you're doing well or everything is good.
  • Live Your Best Life: Enjoying life to the fullest in a unique, individual way.
  • Loud Budgeting: A term coined by TikTok user Lukas Battle, emphasizing saving money not because of a lack of funds but as a choice to not spend. It's about being vocal and proud of saving money, seeing it as a flex.
  • Secure the Bag: Getting money or accomplishing goals in general. It's about achieving success and financial stability.
  • Soft Savings: This concept describes Gen Z's preference for spending on experiences and personal growth now rather than saving for the future. They prioritize mental wellbeing and personal fulfillment over early retirement.

Financial Mindset and Challenges

  • A significant challenge for Gen Z is their lack of emergency savings, exacerbated by high living and college costs, alongside entry-level job wages. This lack of savings negatively impacts their mental health, with over half reporting financial concerns as a stressor.
  • Gen Z shows a preference for less volatile investments, with 38% moving their money from stock-related investments to safer options like savings accounts, money market funds, CDs, or government bonds. This is a higher percentage compared to millennials (33%) and Gen Xers (17%).  Having said this, there is some mixed research on this question with a CFA and FINRA survey concluding that Gen Z Canadian's are actively investing.

See:  Millennial and Gen Z Workforce Demand Purpose-Driven Work: Deloitte Survey Insights

  • The impact of the economy, including inflation and rising prices, has a significant impact on Gen Z's mental health. Key stressors include paying for everyday expenses and housing costs, with over a quarter reporting unemployment and actively seeking jobs.
  • Achieving financial independence is a considerable challenge for Gen Z. They face unique financial challenges as they navigate adulthood, such as paying for college, starting a career, and establishing a budget.

Approach to Money

  • For Gen Z, education is often viewed as a pathway to financial stability, with 88% of the first Gen Z grad class choosing majors based on job availability.
  • Growing up in the age of technology, Gen Z's money habits are heavily influenced by the internet and social media. They are more likely to seek financial advice online and use budgeting tools and apps.
  • A significant portion of Gen Z receives financial support from parents for housing and health insurance. However, there are misconceptions about the importance of building credit and investing for retirement, with many not recognizing the need to start these financial practices early.
  • Gen Z prefers online banking, with a majority content to do their banking completely online with only 20% opting for brick-and-mortar for everyday financial needs. They are less likely to have written a check or visited a physical bank, indicating a shift towards digital financial management.

Bottom Line

Understanding Gen Z's unique financial challenges and mindset is crucial for fintech companies looking to engage this demographic.

See: 

Fintech Opportunities in Wealthy Retired Boomer Markets

Fintech Opportunities in the Wake of Tightened Credit Liquidity in Canada

Fintech solutions that offer educational resources, tools for managing finances, and options for low-risk investments can appeal to Gen Z's desire for financial stability and mental well-being. Additionally, promoting financial literacy and independence through user-friendly platforms can help address some of the misconceptions and anxieties Gen Z faces regarding money.


NCFA Jan 2018 resizeThe 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, artificial intelligence, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Stolen Crypto Funds Halve in 2023 Despite More Hack Attempts

Report | Feb 7, 2024

Stolen Crypto Funds Drop Over 54.3% in 2023 Despite Persistent Threat of Hacking

The recent analysis by Chainalysis has provided the crypto community with a detailed examination of the hacking landscape in 2023, revealing trends that are both encouraging and concerning. The report, "Stolen Crypto Falls in 2023, but Hacking Remains a Threat," offers a comprehensive look at the state of cryptocurrency security, highlighting the significant decrease in stolen funds alongside an uptick in hacking incidents. Below are a few key findings.

See:  Calgary Police and Chainanalysis Launch the Western Canada Cryptocurrency Investigations Centre

Chainalysis's comprehensive analysis reveals a notable decrease in the total value of stolen crypto, which fell by approximately 54.3% to $1.7 billion, down from 2022's record-breaking $3.7 billion. This decline is primarily attributed to a reduction in DeFi hacking incidents, which had previously been the main catalyst for the surge in crypto thefts.

Despite the encouraging decline in stolen funds, the report indicates a slight uptick in hacking activity, with the number of incidents rising from 219 in 2022 to 231 in 2023. This suggests that while the impact of individual hacks may be diminishing, the threat landscape remains active and evolving.

DeFi's Evolving Security Landscape

The report shows that there was $1.1 billion in total value stolen from DeFi platforms in 2023 which was a 63.7% decrease year over year. This reduction in DeFi protocol victimization marks a significant shift in the landscape of stolen funds.

See:  How Permissioned DeFi Will Transform Global Payments

  • Despite several large-scale hacks, such as the incidents involving Euler Finance flash loan attack and Curve Finance liquidity pool hack, there was overall decrease in median loss per DeFi hack by 7.4%
  • Further, a 17.2% reduction in the number of DeFi-specific hacks suggest an improvement in security protocols and a heightened awareness of cybersecurity needs within the DeFi space.

DeFi Hack Types

As DeFi platforms continue to grow in popularity and complexity, they become attractive targets for cybercriminals.  According to insights from Halborn, a security firm specializing in blockchain and web3 solutions, DeFi attack vectors can be broadly classified into two categories: on-chain and off-chain.

See:  Consultation: OSC Wants to Increase Fees for Crypto Firms

On-chain attacks are those that exploit vulnerabilities in the blockchain components of a DeFi protocol, such as smart contracts. These do not stem from the blockchain technology itself but from the way DeFi protocols are implemented on the blockchain.

  • Protocol Exploitation: This involves exploiting vulnerabilities in a protocol's blockchain components, such as validator nodes, the protocol’s virtual machine, or the mining layer.
  • Contagion: This occurs when an attacker exploits vulnerabilities created by a hack in another protocol, including hacks closely related to other protocols.
  • Price Manipulation Hack: This type of attack exploits smart contract vulnerabilities or flawed oracles that do not reflect accurate asset prices, allowing attackers to manipulate digital token prices.
  • Smart Contract Exploitation: Attackers exploit vulnerabilities in smart contract code, granting them direct access to control mechanisms of a protocol and token transfers.
  • Governance Attacks: These attacks involve manipulating a blockchain project with a decentralized governance structure by gaining enough influence or voting rights to enact malicious proposals.

See:  CFTC Publishes DeFi Report for Policymakers and Industry

Off-chain attacks exploit vulnerabilities outside the blockchain, such as in the systems or processes that interact with the blockchain.

  • Insider Attack: This occurs when someone inside the protocol, like a rogue developer, uses privileged information or keys to steal funds.
  • Phishing: Attackers trick users into signing permissions by impersonating a legitimate protocol, allowing them to spend tokens on the users’ behalf or trick users into sending funds to malicious smart contracts.
  • Compromised Server: An attacker compromises a server owned by a protocol, disrupting its normal workflow or gaining knowledge to further exploit the protocol.
  • Wallet Hack: This involves exploiting a protocol that provides custodial/wallet services, subsequently acquiring information about the wallets' operation.
  • Compromised Private Key: Attackers gain access to a user’s private key through leaks or failures in off-chain software.
  • Third-Party Compromised: An attacker gains access to an off-chain third-party program used by a protocol, which can later be used for an exploit.

Looking Ahead

The decline in stolen crypto funds and advancements in DeFi security practices offer hope for a more secure future. However, the rise in hacking incidents and the sophistication of attacks present ongoing challenges that the crypto industry must address.


NCFA Jan 2018 resizeThe 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, artificial intelligence, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter