Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Voices
BIS and Bank of Canada Launch BIS Toronto Innovation Centre
BIS | Jun 17, 2024
Image: BIS Miguel DÍaz, Head of the Toronto Innovation Centre
The Bank for International Settlements (BIS) and the Bank of Canada Launch the BIS Toronto Innovation Centre
The BIS Toronto Innovation Centre was officially inaugurated by the Bank of Canada and the Bank for International Settlements (BIS). This Toronto location is the first BIS Innovation Hub in the Americas, a major international centre for finance and innovation.
The centre seeks to build the fundamental infrastructure needed to enable emerging financial technologies such as open finance, regulatory tech and oversight (suptech), and close accessibility gaps in financial services. The innovation centre will serve all central banks across the Americas and encourage the development of innovative solutions that benefit the public.
See: WEF Insights On Coordinating Global Crypto Regulation
The centre will be overseen by Miguel Díaz together with a group of experts and advisors.
Through innovation, experimentation, and cooperation with other organizations, the BIS Toronto Innovation Centre is positioned to play a significant role in improving the global financial system.
Tiff Macklem, Governor of the Bank of Canada:
"Fostering innovation has never been more crucial; that's as true for central bankers as it is for business leaders. As the financial sector continues to evolve, we need to innovate in different areas and apply skills that aren't traditionally associated with central banking. By doing so, Canadians can share in the benefits of innovation. That's why this hub and our partnership with the BIS are so important."
A Look at Other BIS Innovation Hubs
A number of Innovation Hubs have been developed worldwide by the Bank for International Settlements (BIS), with a particular emphasis on different facets of financial technology and infrastructure. Below compares a few important hubs:
- Hong Kong Centre --> Dedicated to improving cybersecurity, big data analytics, and supporting digital financial ecosystems, the Hong Kong Innovation Hub was established in 2019. It has been essential in creating venues for climate-related financial risks and green finance.
- Singapore Centre --> This hub, which was also founded in 2019, focuses on supervisory technology (SupTech) and regulatory technology (RegTech) to enhance supervisory and regulatory frameworks. It looks at data analytics for regulatory compliance, cross-border payment methods, and digital currencies.
See: UK Digital Securities Sandbox to Drive Fintech Innovation
- Swiss Centre --> Focused on incorporating distributed ledger technology (DLT), such as blockchain, into the financial sector, the Swiss centre was established in 2019. It is also a pioneer in the study, creation, and analysis of central bank digital currencies (CBDCs), as well as in the investigation of their possible effects on financial stability and monetary policy.
- London Centre --> The London centre is dedicated to promoting innovation in digital financial infrastructures. It seeks to improve cybersecurity, investigate the use of artificial intelligence (AI) in finance, and create open banking frameworks.
Every BIS Innovation Hub is positioned strategically to take advantage of local assets and tackle both domestic and international financial issues. The founding of the Toronto hub is consistent with this global strategy, which seeks to promote financial innovation and cooperation throughout the Americas.
Outlook
It is evident from looking at these hubs how the BIS uses local knowledge to further its goal of using technology to promote global financial and monetary cooperation.
See: Balancing Fintech Innovation and Regulation
As the first of its kind in the Americas, the Toronto Innovation Centre will be a key component of this global network, concentrating on improving financial accessibility throughout the area and laying the groundwork for financial technologies.
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, 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
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Terraform Labs’ $4.55 Billion SEC Settlement
Crypto Enforcement | Jun 13, 2024
Image: Pixabay/WilliamCho
Terraform Labs Settles SEC Fraud Case with $4.55 Billion Penalty
One of the biggest fines in SEC history, $4.55 billion, will be paid by Terraform Labs and its creator, Do Kwon, as part of a settlement with the Securities and Exchange Commission (SEC) on fraud charges.
- Do Kwon launched Terraform Labs, which created the stablecoin TerraUSD. The stablecoin crashed in May 2022, causing an estimated $40 billion in damages for investors.
- The SEC charged Terraform Labs with misrepresenting the dangers to investors and offering unregistered securities while making false claims regarding the stability of TerraUSD.
See: SEC Scrutinizes Terraform’s $166M Transfer to Dentons
- A $420 million civil punishment for Terraform and a $80 million civil fine for Do Kwon are included in the $4.55 billion settlement, along with $4.05 billion in disgorgement and interest.
- In accordance with the resolution, Terraform must also shut down operations and apply for approval of a Chapter 11 liquidation plan. A trustee will be chosen to oversee any residual assets and make payments to investors and creditors.
- The need for cryptocurrency companies to adhere to financial regulations, transparency and truthful portrayal of financial products and services to prevent deceiving investors are among the most important lessons learned.
Do Kwon, who was detained and found guilty in Montenegro in 2023 of trying to travel with a forged passport. Since then, officials in Montenegro have been debating with the institution over whether to extradite the disgraced former crypto mogul to South Korea or the United States.
Closing Outlook
As regulators around the world scrutinize digital assets, companies must prioritize compliance and transparency to foster a trustworthy market environment.
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, 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
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CFPB’s New Rule Boosts Open Banking Standards
Open Banking Jun 12, 2024
Image: Freepik
CFPB Publishes Final Rule on Personal Financial Data Rights
The Consumer Financial Protection Bureau (CFPB) has published final rules for personal financial data rights (PDF)| Newsroom announcement, which focuses on recognizing industry standard-setting groups. The approved rule is a part of a larger initiative to enhance consumer's control over their financial data and promote open banking by implementing Section 1033 of the customer Financial Protection Act. Here's what you need to know.
10 Takeways
1. The final regulation will go into force on July 11, 2024. This gives companies one month to get ready for compliance.
2. The rule lays out the procedure by which industry organizations can be recognized by the CFPB. Consensus standards will be created by recognized organizations to help with the new Personal Financial Data Rights rule's compliance. The CFPB also released this guide.
3. Five essential characteristics that standard-setting bodies must exhibit are: transparency, openness, balance, due process and appeals, and consensus. These characteristics ensure fairness, inclusivity, and transparency of the standards that are set.
See: Open Banking: Revolutionizing Financial Data Sharing
4. This is an open role opportunity. All interested parties, including consumer advocacy organizations, app developers, and different financial institutions, must have access to the processes and procedures of standard-setting bodies. Because of its diversity, no one group is able to dominate the market.
5. To prevent any one group from dominating, decisions must take into account the interests of all parties involved. Meaningful representation from both big and small entities must be part of any decisions.
6. Rather than being created by unanimity, standards must be formed by universal agreement (consensus standards). This guarantees that every opinion is taken into account while creating standards.
7. Accredited organizations are required to have written, publicly accessible policies as well as equitable procedures for hearing appeals and settling disputes. This includes providing sufficient notice of meetings and time for review and objections as per this MortgagePoint article.
8. Transparent methods must be used to create standards which must be open to the public. As stated by American Banker, "this transparency is crucial for maintaining trust and ensuring that the standards are developed openly."
9. Organizations must reapply for standards accreditation after their five-year recognition period is over. This recurring evaluation makes sure that the requirements are met throughout time and that the criteria are still applicable.
See: Open Banking Regulation in the U.S. Strikes a Chord
10. The rule lays the groundwork for future rules that will rely on these acknowledged standards, even if it does not impose any immediate costs for compliance. It is recommended that financial institutions and fintech startups are ready to comply with these agreed norms in the future.
Rohit Chopra, CFPB Director:
"Industry standards can be weaponized by dominant firms to maintain their market position, undermining competition for all. Today's rule will prevent these firms from rigging standards in their favor by identifying attributes the CFPB will use to recognize standard setters"
Image: Freepik/tonodiaz
Implications of CFPBs Final Rule
CFPBs final rule on personal financial data rights is a big step towards open banking and open finance in the US. Here's what it means to various stakeholders.
Empowerment (Control), Access and Potential Cost Savings for Consumers
- Thanks to the ability to share their financial information with fintech companies and other third parties for individualized financial services, customers have more control over their financial information.
See: Credit Reference Agencies Are Coming For Your Data
- Boosts financial inclusion by providing underprivileged communities with access to specialized financial services via fintech innovation and open banking.
- The rule aims to lower long-term costs and improve efficiency through uniform methods, but it does impose certain early expenses on industry participants. Consumers may benefit from these cost savings, which would increase the accessibility and affordability of financial services.
Fintechs
- The rule gives fintechs the chance to innovate and provide services that are competitive by allowing data sharing. By having direct access to customer data, smaller fintech businesses can better compete with larger incumbents in the market.
- Fintechs must make sure that the new standards are followed, which will come with compliance costs and the creation of safe data-sharing solutions.
Financial Institutions
- To comply, banks and other financial organizations must adjust their data-sharing procedures to comply with new rules and accepted norms. To be competitive, this may require more tech expenses and potentially a new business strategy.
- According to American Banker, the law permits banks to charge reasonable fees to third parties for access to their data, which helps them defray the expenses of compliance and data security improvements.
See: 2023 Data Privacy in North America – Year in Review
- The rule requires standard-setting organizations to have open and honest procedures, guaranteeing that customers are aware of the uses and sharing of their data. This boosts confidence in the banking sector
Standard Setting Groups
- The rule outlines the requirements for being recognized as a body that sets standards, placing a strong emphasis on openness, balance, due process, consensus, and transparency. These organizations will be essential in creating and upholding the industry standards.
- To make sure that standards keep up with developments in the market and with emerging technologies, recognized bodies are required to go through periodic assessments every five years.
Outlook
It is anticipated that CFPBs new rule will promote innovation, increase consumer empowerment, and guarantee equitable competition between fintech startups and financial institutions.
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, 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
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MaRS Discovery District Restructures Amid Funding Challenges
MaRS | Jun 11, 2024
Image: Freepik/master1305
MaRS Discovery District Job Cuts 20 Jobs and Looks to Operate a Leaner Business Model
Approximately 20 positions, including several top-level responsibilities, were eliminated as a part of a recent major restructure at MaRS Discovery District, one of Canada's leading government funded innovation support organizations. Amidst financial challenges, MaRS looks to reduce hierarchy and move towards a more agile and lean structure in order to better allocate resources to programming that supports founders and encourages ecosystem engagement.
See: Corporate Venture Capital in Canada: Insights and Challenges
Since its founding in 2000, MaRS has expanded its support to include a variety of tech industries, but its initial focus was on the medical and allied sciences. It has been crucial in helping businesses with advisory services and in creating venture capital projects like Graphite Ventures and the MaRS Investment Accelerator Fund.
Alison Nankivell, CEO, MaRS stated:
“Our path forward necessitates changes toward a more agile and lean organizational structure that reduces hierarchy and leadership roles in favor of a reallocation of resources to support programming that more effectively supports founders, fosters even greater ecosystem collaboration, and ultimately increases our impact.”
Financial Overview and Key Departures
- Since 2019, MaRS's non-government revenue drastically decreased from $29.1 million to just $10.1 million.
- Total sales revenue declined 40% from $49.3 million in 2019 to $29.6 million in the fiscal year 2023.
- In spite of lower income, employee costs grew by 2.5% to $23.9 million from the year prior.
- Yung Wu, the former CEO received a 37% pay raise from $475,000 in 2019 to $650,625 in 2023.
See: CIC Launch Delayed Impacting Innovation Funding Landscape
- Less than two years after receiving a sizable promotion and pay increase, Krista Jones, Chief Delivery Officer (earned $346,000 annually), made her exit announcement at the end of June.
- Nicole Barry, the Chief Financial Officer (earned $326,000), is also departing from the company.
Controversies
- Provincial and federal funding account for two thirds of MaRS's income. The financial strain has increased due to recent decreases in these grants. Its financial deal with the Ontario government, which provided $10 million annually for two years, ended two months ago. Furthermore, future funding is questionable as some federal funds terminated at the end of 2023.
- MaRS is housed in 55,000 square feet at Toronto's Waterfront Innovation Centre and 1.5 million square feet in downtown Toronto. There has been debate over MaRS's real estate endeavours, with some speculating that it prioritizes real estate over innovation.
See: U.S. Expanding Access to Capital Act Boosts Startup Funding
Conclusion
Despite the structural and financial obstacles, MaRS remains dedicated to helping high-growth businesses and promoting innovation in Canada's tech sector. For the organization to maintain its impact and sustainability, it needs to increase engagement with industry and the charitable sector.
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, 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
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Insights from the Tokenization Report Act of 2024 Hearing
Tokenization | Jun 11, 2024
Image: Tokenization of RWA Tokenization Report Act of 2024 (youtube)
US Congress considers the regulatory challenges and benefits of tokenization
On June 5, 2024, Washington lawmakers discussed the "Tokenization Report Act of 2024" (HR 8464), which is sponsored by Rep. William Timmons and co-sponsored by Rep. Ritchie Torres in the 118th Congress. The Act mandates a thorough report on the advantages and disadvantages of asset tokenization using blockchain technology, the variations between blockchain networks, the current level of interoperability, and international regulatory strategies.
The Federal Deposit Insurance Corporation, the Comptroller of the Currency, the National Credit Union Administration Board, and the Board of Governors of the Federal Reserve System are to jointly submit this report. Within 180 days after the act's passage, the report must be given to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services.
See: U.S. House passes FIT21 with Bipartisan Support
Strong regulations are required to control the tokenization of RWAs, as recent talks in Washington have shown. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), among other legislative and regulatory organizations, are investigating the applicability of current securities and commodities rules to tokenized assets. The classification of digital tokens is a central topic of discussion in the policy space. The question of whether tokenized assets belong in the securities, commodities, or new asset class categories is being investigated by regulators. This classification will have a big impact on the regulations, taxes, and trading of these assets.
The Tokenization Report Act of 2024 (HR 8464)
Objectives
- Determine how blockchain technology is being used for asset tokenization, both now and in the future.
- Determine regulatory implications such as possible obstacles to regulation and suggested policies to deal with them.
- Examine the effects of tokenization on market liquidity, investor protection, and financial stability.
- Actionable suggestions should be given to legislators in order to promote a well-balanced regulatory environment that promotes innovation and protects the interests of all parties involved.
Scope of the Report
- An analysis of the advantages and disadvantages of tokenizing traditional assets via blockchain networks, taking into account effects on counterparty risk, cost, and settlement efficiency.
- The differences between permissioned and permissionless blockchain networks are compared, along with the consequences for asset tokenization.
- An evaluation of the state of blockchain integration and interoperability across various networks and platforms, as well as the implications for broad adoption.
See: Citi’s PoC Success in Private Market Tokenization
- Review of emerging global regulatory approaches to tokenizing traditional assets including capital requirements.
- An assessment of the additional guidelines or rules required to support the tokenization of traditional assets.
- An examination of how blockchain networks' control features affect traditional assets that have been tokenized and how much of their current risk profiles they can carry.
- Synopsis of the regulations and legal framework around the tokenization of traditional assets using blockchain technology.
The act also requires the federal agencies concerned to gather public feedback in order to inform the report's development. This makes sure that when developing the regulatory framework, the opinions of different stakeholders—such as investors, technology developers, and industry experts—are taken into account.
Key Takeaways from the Hearing
The real-world asset (RWA) tokenization's disruptive potential was highlighted during the House Financial Services Subcommittee on Digital Assets' recent hearing on the topic. Chair French Hill highlighted how blockchain technology may lower costs, improve efficiency and transparency, and alleviate liquidity concerns in order to modernize U.S. markets. See more at blockchain tipsheet
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The Intelligence Authorization Act for Fiscal Year 2025 (S.4443) incorporates Senator Mark Warner's Terrorist Financing Prevention Act (S.3441), which requires the identification of foreign financial institutions and digital asset facilitators involved in unlawful transactions. Although the goal of this action is to stop the funding of terrorism, there are worries about the growing sanctions and regulatory costs on the digital asset market.
See: Real World Implementation of Real Estate Tokenization
There was no denying the partisan divide during the hearing. Democratic members emphasized consumer safeguards and fraud prevention, frequently criticizing recent regulatory initiatives like the Financial Innovation and Technology for the 21st Century Act (FIT 21). Republican members, on the other hand, emphasized the innovation and efficiency brought about by tokenization.
The Depository Trust and Clearing Corporation's Nadine Chakar emphasized how tokenization could improve the architecture of the financial markets. Nonetheless, there was a general consensus regarding the necessity for balanced legislation and the clarity of regulations. Representative Wiley Nickel and Vice Chair of the Subcommittee Warren Davidson expressed support for more precise rules to encourage innovation in the digital asset market.
RWA Tokenization Trends for 2024
- Tokenization is being adopted for a variety of asset classes by major financial institutional organizations, including HSBC, Goldman Sachs, and BlackRock. These establishments are employing blockchain technology to provide digital renditions of conventional financial instruments, including as money market funds and bonds.
See: MAS Update: Asset Tokenization in Project Guardian
- To support the expansion of the tokenization business, strong regulatory frameworks are being developed. The Electronic Trade Documents Act of the United Kingdom, for example, is compliant with blockchain applications and guarantees a safe and controlled environment for tokenized assets.
- Decentralized finance (DeFi) protocols are increasingly using tokenized RWAs as collateral. The adaptability and usefulness of tokenized assets are increased by this integration, which makes it possible to offer more advanced financial products and services (BIT Blog).
- There is a lot of room for expansion in the tokenized asset market across a number of industries, such as commodities, real estate, and the arts. The growing awareness of tokenization's advantages among institutional and retail investors is what is driving this expansion.
Conclusion
The Tokenization Report Act of 2024 is essential because it lays the groundwork for well-informed government that promotes innovation while defending investor interests. The future of tokenization will be shaped by the continuing legislative initiatives and regulatory conversations, opening the door to a more effective and inclusive financial environment.
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, 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
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Regulatory Demands: Fintechs Caught in the Crossfire?
Regulation | Jun 5, 2024
Image: Freepik/rawpixel
Podcast Insights: Hester Peirce on SEC Rule-making and Regulatory Demands
In a recent podcast interview hosted by Compliance Week titled "Regulatory Demands," SEC commissioner Hester Peirce, often known as "Crypto mom," is blunt in her criticism of the SEC's rule-making process. However, what does this signify for investors, innovators, and fintechs—the main participants in the game?
Transparency Concerns
"We've seen a flood of rulemaking come out of the SEC in the last year or two... I have some concerns that the Commission hasn't been as engaged in public outreach as it could be, and the best way to write rules is to get input from the people who are actually going to be complying with them...If we start treating it as a burden rather than a privilege to get the input of the public, then our rules just won’t be as good, and they won’t stand the test of time."
Peirce focuses her critique on the SEC's lack of public outreach. "We've seen a flood of rulemaking come out of the SEC in the last year or two," according to her, "I have some concerns that the Commission hasn't been as engaged in public outreach as it could be."
See: Peirce Laments, SEC ‘Squandered A Decade’
Fintech companies, which are renowned for their agility and capacity for rapid adaptation, face difficulties as a result of this lack of transparency. According to Peirce, "the best way to write rules is to get input from the people who are actually going to be complying with them," therefore without clear communication and participation in the rule-making process, these restrictions may inhibit innovation and impair their capacity to benefit investors.
Protecting Investors, Not Stifling Innovation
"If a compliance officer is afraid to speak up... The focus should be on what the compliance officer did, not just on the outcome...Innovation is something that the SEC should be encouraging, not stifling."
Peirce goes one step further, emphasizing how these fintech companies may have a chilling effect on compliance officials. "If a compliance officer is afraid to speak up because they're worried about being blamed if something goes wrong," she contends, "The focus should be on what the compliance officer did, not just on the outcome." As Peirce notes, these officers may be reluctant to alert investors to any risks connected to novel financial products out of fear of incurring excessive responsibility, "leaving investors exposed." In the long run, this might make investors less protected.
See: Balancing Fintech Innovation and Regulation
Perhaps Peirce's most important quote is "Innovation is something that the SEC should be encouraging, not stifling," which is a direct call to action for the agency. This is a clear message for entrepreneurs and fintech companies alike. Peirce contends that in addition to safeguarding investors, the SEC should promote an atmosphere that welcomes novel concepts and technological advancements.
Striking the Balance
"We need to be mindful of the costs of regulation, and not just the benefits. When we write rules, we should try to write them in a clear and concise way."
Peirce does concede that rules are necessary. "We need to be mindful of the costs of regulation, and not just the benefits," she asserts. "When we write rules, we should try to write them in a clear and concise way." As Peirce notes, laws that are unduly onerous and complicated can "put a strain on smaller fintechs and innovators," restricting their capacity to compete. They can prosper as long as laws are reasonable and clear, safeguarding investors in the process.
See: Insights from the UK’s Pro-Innovation Regulation Review
Peirce is aware of the difficult balancing act. "The SEC needs to take a thoughtful approach to writing rules for this new and innovative area," she warns. Encouraging innovation while safeguarding investors must be balanced if the financial system is to remain healthy in the long run.
Closing Thought
The interview with Hester Peirce provides an insightful viewpoint on the difficulties faced by financial industry players. Her emphasis on encouraging innovation, emphasizing results over blame, and encouraging open communication are all in line with the goals of NCFA Canada and its members. The SEC can promote responsible innovation in the financial sector and eventually help all investors by pushing for a more balanced approach to regulation.
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, 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
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The Necessity of Copyrighting Your Voice in 2024
AI Voice | Jun 3, 2024
Image: Freepik
Exploring The Necessity of Copyrighting Your Voice in 2024
As artificial intelligence (AI) technology continues to rapidly evolve, safeguarding personal and business assets has become increasingly important. One interesting question arising in 2024 is exploring how necessary it is to copyright one's voice.
What Does the Law Say?
Traditional Copyright Law
This falls back to traditional print copyright law: Copyright laws do not protect voices. When it comes to copyright protection, voices are not “fixed” in a tangible medium of expression.
See: Generative AI: A Primer On Canadian AI and IP
Rather, copyright law protects the words or sounds that might be produced by a voice, such as recorded songs or spoken performances but does not protect voices.
Right of Publicity
The right of publicity protects an individual's name, portrait, voice, and likeness for commercial purposes in many states and is the most likely legal structure that a celebrity or anyone who does not want their voice to be used commercially or without their permission.
Legal Precedent Cases
- Bette Midler vs. Ford Motor Co. -> Midler won a suit against Ford for using a similar sounding voice of Midler in a commercial, which also established that unique voices fall under right of publicity.
- Tom Waits vs. Frit-o-lay -> Waits wins case against Frito-lay for their use of a voice-over that sounds like Waits in a commercial, solidifying further that unique voices are protectable and establishing precedent for punitive components.
Why Protect Your Voice?
- For Individuals -> A unique manner of speaking is a vital part of your identity. Impersonation with fraudulent use with AI generating voices and deepfakes, it is easier now to copy a voice. When you take action to protect your voice this can prevent others from digitally manipulating it without permission.
- For work -> Businesses use different voices in branding, for example in ads and customer service. Safeguard them and keep the continuity of their unique voices, which is characteristic for sustaining and believing the brand. When hiring voice actors, companies must ensure that the voice performers are properly licensed, and that there is no breach of any law concerning the unauthorized use of the recorded material.
See: Generative AI and Major Human Rights Fintech Risks
- Biometric voice protection in fintech -> In the fintech sector, voice protection means something very specific: many fintech companies use voice biometrics to authenticate their customers. It is essential for security and anti-fraud measures to be taken in order to protect these biometric data points. Securing all voice interactions (like through AI assistants) is essential to maintain customer trust and stay compliant with data privacy regulations.
Interesting Case - AI-Made Song with Drake and The Weeknd
As an example, a popular AI-generated song called “Heart on My Sleeve" included the artificial voices of Drake and The Weeknd. Universal Music Group filed copyright takedown request for the viral song made by AI on Spotify, YouTube, Apple Music, Soundcloud and Bandcamp. Because of this, it highlights gaps in the law in terms of protecting artists against not being asked to lend their voices to AI-generated content.
Conclusion
Though you cannot copyright your voice, there is range of legal protections through the right of publicity and contract. Any public-facing digital application may be used in this way, particularly those in the fintech sector, to guarantee protection of the voice for their identity, and to also protect the biometric data and maintain trust with their customers.
See: NIST Insights: GenAI Risk Management Framework
With the continued evolution of technology and AI, we can expect the legal world at some point in the future to create additional protections for our voices and other personal identifiers as well. Stay tuned...
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, 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
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