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
Gensler Warns of ‘AI Washing’ in the Financial Industry
Speech | Feb 14, 2024
Image by Freepik
Insights from Gary Gensler's speech titled "AI, Finance, Movies, and the Law" at Yale Law School, discussing the intersection of artificial intelligence (AI) with finance and legal frameworks.
While this isn't Gensler's first kick at the can in terms of AI meets finance speeches, below are some insights from his speech that could be informative for members and readers of NCFA Canada:
See: AI and the Metaverse: The Imperative for Rules and Regulations
AI is super important we need to learn everything about it: Without a doubt, AI adoption is proliferating widely across various sectors, including finance, where it's used for call centers, account openings, compliance programs, trading algorithms, sentiment analysis, and more. This is why it's imperative that everyone including the SEC understand AI's capabilities and limitations within the financial industry.
Opportunities and challenges
AI can bring a swath of benefits to finance, such as greater financial inclusion and enhanced personalized user interactions and experiences. However, Gensler points out the many challenges, including the often unexplainable nature of AI decisions, the potential for biased outcomes, and the accuracy of predictive models. For the fintech sector, these points stress the need for careful integration of AI technologies, ensuring they are transparent, fair, and reliable.
Gensler discusses the systemic risks that could arise from widespread reliance on a few AI models or platforms within the financial industry and emphasized the need for updated regulatory frameworks to address these risks, suggesting that the current risk management models and guidance may not be sufficient. Regulators will need deeper foresight and be incredibly adaptable to manage potentially wide reaching systemic implications.
Further, the current Chairman of the SEC is concerned with AI deceptions and manipulation such as "AI washing" — misleading claims about a product's AI capabilities, truthfulness in disclosures, and protecting investors from fraud and misrepresentation in the age of AI (think 'deep fakes').
A review by Bloomberg Law found that over 40% of S&P 500 companies mentioned AI in their most recent annual reports to the SEC, a significant increase from previous years. Companies are advised to be cautious about their AI disclosures, ensuring they accurately reflect the technology's role in their operations and the risks it poses.
See: The Use and Regulation of Artificial Intelligence: When AI Meets Consumer Duty
Gensler conveyed the necessity for those deploying AI models in finance to implement appropriate guardrails, considering current laws and regulations. This includes ensuring AI models do not engage in prohibited activities like front-running or providing conflicted investment advice. The emphasis here is on the ethical and legal responsibilities of fintech companies in deploying AI technologies.
Outlook
Gensler's speech presents a regulatory insider's overview of the opportunities and challenges at the nexus of AI, finance, and regulation. His insights highlight the transformative potential of AI in financial services, while also calling for a balanced approach that addresses ethical, legal, and systemic concerns.
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
 |  |  |
|---|---|---|
 |  |  |
Fintech Can Combat Corporate Greenwashing
Greenwashing | Feb 13, 2024
Image: Unsplash/micheile henderson
Fintech's Role in Unveiling Greenwashing and Promoting True Sustainability
Greenwashing, the practice of making misleading or deceptive claims about a company's environmental impact, poses a significant threat to consumer trust and the credibility of sustainable finance. From Shell Canada's "Drive Carbon Neutral" program to Enbridge Gas's portrayal of natural gas as "clean energy," these cases reveal a concerning trend of companies overstating their environmental commitments. Such practices not only mislead consumers but also obscure the landscape for investors seeking genuine sustainable investment opportunities.
See: Climate Inflation Discussion for a Sustainable Future
The table below is some of the 'greenwashing' cases being investigated by the competition bureau for false advertising claims.
Recent Cases Being Investigated by the Bureau
| Company | Case | The Issue | Status | Fintech Solutions |
|---|---|---|---|---|
| Shell Canada | Drive Carbon Neutral Program | Misleading claims about achieving carbon neutrality through fuel purchases. | Shell Canada ended the program; emphasizes the need for transparent carbon offset claims. | Blockchain for tracking carbon credits; AI for verifying environmental impact claims. |
| Enbridge Gas | Natural Gas as Clean Energy | Advertised fossil fuel-derived natural gas as "clean energy" and "low carbon," misleading about its environmental impact. | Under investigation by the Competition Bureau. | Blockchain for lifecycle analysis transparency; AI for true environmental impact assessment. |
| Six oilsands companies | Net Zero Claims by Oilsands Companies | Claims of progressing toward net zero emissions, potentially overstating environmental efforts. | Under investigation by the Competition Bureau. | ESG scoring on investment platforms; machine learning for analyzing sustainability claims. |
| Lululemon | "Be Planet" Campaign | Alleged inconsistency between sustainability claims and actual environmental impact, particularly regarding fossil fuel-driven manufacturing. | Complaint not yet officially filed with the Competition Bureau as of the article's publication. | Supply chain transparency tools; platforms requiring evidence-based sustainability reporting. |
| Royal Bank of Canada (RBC) | Climate Blueprint | Marketed support for Paris Agreement and net-zero emissions by 2050, but financing of fossil fuels contradicts these claims. | Under investigation by the Competition Bureau since September 2022. | Enhanced ESG reporting and analysis platforms; fintech solutions for transparent and accountable sustainability and financing claims. |
Fintech's Transparency Solutions for Sustainable Finance
Fintech innovations offer powerful tools to peel back the layers of corporate greenwashing, providing a level of transparency previously unattainable.
See: McKinsey: Tech Trends 2023 That Every Fintech, Bank, or Financial Service Provider Must Consider
Blockchain technology, for example, can be utilized to create immutable records of a company's environmental impact claims, ensuring that any carbon offsetting or sustainability initiatives are accurately reported and verified. This technology can serve as a foundation for developing platforms that track and verify the authenticity of corporate environmental claims, offering a clear view of their actual sustainability practices.
By integrating ESG (Environmental, Social, and Governance) criteria into investment platforms, fintech can help investors make informed decisions based on comprehensive, verified data. Investment and dealroom platforms, for instance, can implement ESG scoring systems that rate projects and companies based on their genuine sustainability efforts, guiding investors towards truly green opportunities.
AI and machine learning algorithms can analyze vast amounts of data to identify inconsistencies in companies' environmental claims, flagging potential greenwashing for further investigation. This analytical capability is crucial for due diligence processes, ensuring that investments align with the values of sustainable finance.
Conclusion
See: Canadian Banks Face Scrutiny Over Sustainability Claims
The intersection of fintech and sustainable finance represents a frontier of opportunity to combat greenwashing, promote genuine sustainability efforts, and create foundational standards to support the advancement of greater ESG and responsible investing by all key stakeholders.
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
| | |
|---|---|---|
| | |
CZs Sentencing Delayed to Late April, Fuelling Speculation
News | Feb 13, 2024
Image by Drazen Zigic on Freepik
Binance Founder, Changpeng Zhao (CZ), Sentencing has been Postponed to April 30, 2024
Changpeng Zhao (CZ), the founder of Binance, faces up to 18 months in prison over money laundering charges, according to a recent update. However, a filing by the prosecution indicated that he might face a harsher punishment than initially expected, with the possibility of any sentence up to the statutory maximum of ten years. The court has rescheduled CZ's sentencing which was originally scheduled for February 23 to April 30, 2024, extending the timeline for legal proceedings.
See: Trust Fallacy: 75% of Payment Fraud in Crypto is Carried Out by KYC-verified Accounts
Former U.S. Securities and Exchange Commission official John Reed Stark suggested that Zhao could face a 12–18 month sentence at a minimum security prison under U.S. sentencing guidelines. Nonetheless, Zhao's legal team is expected to request no jail time or an alternative sentence, combining prison time with home detention and probation. Currently, Zhao is out on bail on a $175 million bond and resides in the U.S. awaiting his sentencing.
The specific reasons for the delay have not been publicly disclosed, but such postponements are not uncommon in complex legal cases involving financial regulations and international operations.
The case against Changpeng Zhao is part of a broader trend of increasing regulatory scrutiny on cryptocurrency exchanges and other digital asset service providers. Regulators worldwide are focusing on compliance with anti-money laundering (AML) standards, know your customer (KYC) procedures, and other regulatory mandates to ensure the integrity and stability of financial markets. The postponement and eventual outcome of CZ's sentencing are of great interest to investors, regulatory bodies, and other market participants.
See: The Vanguard of Decentralized Exchanges (DEX)
While the exact details of the potential punishment remain speculative until the court's final decision, the charges against Zhao could lead to significant legal repercussions and stiffer sentence. These may include hefty fines and possibly restrictions on his and Binance's operations, depending on the nature of the violations and the court's final judgment.
Outlook
This delay in sentencing allows for further speculation and preparation among stakeholders within the cryptocurrency industry. The outcome of this case could set important precedents for how digital asset companies operate and are regulated on a global scale.
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
| | |
|---|---|---|
| | |
Globalive’s Lacavera Acquires Wealth One Bank
M&A News | Feb 12, 2024
Image by rawpixel.com on Freepik
Globalive Capital has officially entered into an agreement to acquire Wealth One Bank of Canada, a move that is currently pending regulatory and government approvals.
Anthony Lacavera, the visionary founder of Globalive Capital Inc., has once again made headlines, this time in the Canadian banking sector. Following his successful disruption of the telecom industry with Wind Mobile, Lacavera is poised to bring his innovative approach to banking with the acquisition of Wealth One Bank of Canada.
See: KOHO’s Strategic Push Towards A Banking License
- An article in the Wealth Professional reported that Lacavera had raised $51 million for a consortium bid through a special purpose vehicle to secure a 54% stake in Wealth One Bank with existing shareholders retaining a minority share, which has been navigating federally imposed national security conditions. The deal is supported by a mix of Canadian and U.S. backers and could see further capital injections of up to $200 million in the future.
- With over $600 million in assets as of November, according to the latest filings with the Office of the Superintendent of Financial Institutions.
- This strategic acquisition is aiming to leverage Wealth One's Schedule 1 banking license to provide Canadians with more choices in banking services, echoing Lacavera's commitment to challenge and diversify industries that benefit from increased competition.
Addressing the Oligopoly
Lacavera criticizes the current banking oligopoly for stifling competition, leading to higher prices and a diminished experience for Canadian consumers. His bid for Wealth One is seen as a long-term strategy to introduce more competition into the market, which he believes is crucial for the economy.
See: DoF Consultation: Financial Competition in Canada
The focus is not just on serving the Chinese immigrant community, which was Wealth One's initial target since its launch in 2016, but on expanding offerings to all Canadians, including the approximately 500,000 newcomers arriving each year.
Challenges and Regulatory Scrutiny
The bid comes amid national security concerns, with the federal government previously citing potential links between Wealth One and the Chinese government. This led to directives for three investors to sever ties with the bank. Despite these challenges, Lacavera is confident in the bank's solid foundation and believes that the acquisition could alleviate regulatory and government concerns.
Outlook
Anthony Lacavera's track record of innovation and disruption promises a future where competition is intensified, and consumers have access to a broader range of banking services. While regulatory hurdles loom, the acquisition aligns with the broader goals of enhancing financial inclusivity and choice for Canadians across the country.
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
| | |
|---|---|---|
| | |
NBA in Legal Battle Over Crypto Marketing
News | Feb 8, 2024
Image: Freepik/Midjourney
NBA Faces Lawsuit for Alleged Negligence in Crypto Exchange Marketing Deals
The National Basketball Association (NBA) is currently embroiled in a significant legal challenge, accused of "gross negligence" for its marketing affiliations with the now-defunct crypto exchange Voyager Digital Holdings Inc.
- Investors have filed a lawsuit against the NBA, claiming the association was "grossly negligent" in its marketing agreement with Voyager Digital Holdings Inc., facilitated by Mark Cuban, the then-owner of the Dallas Mavericks.
- This partnership, formalized through a five-year deal making Voyager's token the official cryptocurrency of the Mavericks, is blamed for leading investors into what is described as "an unregulated and unsustainable fraud," culminating in $4.2 billion in losses. The situation was further complicated when Voyager filed for Chapter 11 protection from creditors in 2022, leading to a court-authorized liquidation of assets to repay a portion of the crypto held on its platform to customers.
See: Kim Kardashian Pays $1.26M to the SEC in Penalties for Unlawfully Touting Crypto
- In 2022, Mark Cuban faced legal action for his promotion of Voyager's offerings. The lawsuit accused him of endorsing Voyager's products, specifically the platform's Voyager Earn Program Accounts (EPAs), as viable investments, despite allegations that he was aware these were "unregistered securities."
- The lawsuit not only targets the NBA but also implicates Voyager's legal advisors, McCarter & English, accusing them of producing fraudulent legal opinions that contributed to the alleged conspiracy. This highlights the broader implications of the case, affecting various stakeholders within the crypto and legal sectors.
- The collapse of Voyager and similar crypto entities like FTX has spotlighted the influence of celebrity endorsements in the crypto market. High-profile figures, including sports stars and entertainers, have faced lawsuits for their promotional activities, emphasizing the legal risks associated with celebrity-driven marketing in high-risk financial products.
Why It's Important
This legal battle may set a precedent for how sports organizations approach partnerships with financial and tech companies, especially in emerging and volatile markets like cryptocurrency.
See: FTX Fallout: Stephen Curry and Tom Brady Reportedly Under Investigation in Texas
This case could prompt stricter scrutiny and regulations on sports organizations' marketing deals, especially those involving financial products, to protect investors and maintain the integrity of the sports industry.
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
| | |
|---|---|---|
| | |
Meta Seeks New Standards in Labeling AI-generated Content
AI | Feb 7, 2024
Image by macrovector on Freepik
Meta Expands AI-generated Image Labeling To Enhance Transparency and Accountability Across All Platforms
According to TechCrunch, Meta is broadening the scope of its AI-generated imagery labeling posted by users to enhance transparency and user awareness The strategic move is expected to increase the volume of labeled AI-generated synthetic versus authentic content distribution on Meta's platforms. The rollout of expanded labeling will occur in the coming months, covering all languages supported by each app. Nick Clegg, Meta's president of global affairs, emphasized the company's collaboration with industry partners to establish common technical standards signaling AI-generated content.
Challenges and Standards
The task of labeling AI-generated content extends beyond images to the more complex realms of video and audio. Current technology faces challenges in detecting AI-generated videos and audio due to the nascent adoption of marking and watermarking necessary for effective detection. Meta is exploring various strategies to overcome these obstacles, including the development of classifiers to detect AI-generated content lacking invisible markers and efforts to make it more difficult to remove or alter invisible watermarks.
See: The Frontline of AI’s Copyright Law Battle in 2024
Meta's policy now requires users to disclose when posting "photorealistic" AI-generated video or "realistic-sounding" audio, reserving the right to label content deemed to pose a high risk of deceiving the public on matters of importance. Failure to comply with this disclosure requirement could result in penalties under Meta's Community Standards.
Meta's proactive measures reflect a commitment to safeguarding the integrity of digital content, particularly in the context of significant global events such as elections. By working with other leading companies and forums like the Partnership on AI, Meta aims to develop common standards for identifying AI-generated content. This collaborative approach seeks to mitigate the potential harms associated with generative AI, including the proliferation of fake but realistic-seeming content.
The potential for deepfakes and other forms of misleading content also looms large, necessitating advanced detection technologies and ethical guidelines to safeguard against misuse.
Impact on Creators
On one hand, generative AI technologies offer artists, photographers, videographers, and other content creators unprecedented tools for creativity and innovation. These tools can generate new forms of art, enhance productivity, and open up new avenues for artistic expression that were previously unimaginable.
However, the labeling of AI-generated content introduces a layer of complexity regarding authenticity and originality. For creators who pride themselves on producing original content, the rise of AI-generated imagery could dilute the perceived value of human creativity.
See: Canada New AI Copyright Policy Consultation
One huge area to watch is the is how creators' work is received and monetized if their content is labeled AI-generated / augmented versus holistically authentic. If AI-generated content is labeled as such, it might be treated differently by algorithms, affecting visibility, engagement, and revenue opportunities. Creators may need to adapt by clearly distinguishing between AI-assisted and purely human-made creations, potentially affecting their creative process and how they market their work.
Future of AI in Digital Media
As we look ahead, the integration of AI in digital media promises to reshape the landscape of content creation, offering both challenges and opportunities. The ongoing dialogue between technology, creativity, and ethics will be pivotal in forging a future where AI-generated and human-created content not only coexist but also enhance our digital experiences in meaningful ways.
See: Australia to Regulate High-Risk Artificial Intelligence
Meta's initiative to label AI-generated content on platforms like Facebook, Instagram, and Threads is a signal and big step towards ensuring transparency and trust online. This strategic move, aimed at distinguishing between synthetic and authentic content, if successful, will help establish sets a new standard for accountability and ethical practices in the tech industry.
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
| | |
|---|---|---|
| | |
NASAA Intensifies Access to Capital Debate
Access to Capital | Feb 5, 2024
Image: Unsplash/Lennon Cheng
NASAA Opposes Expanding Access to Capital Act, Citing Investor Protection Concerns; Industry Leaders Disagree
In a recent letter, the North American Securities Administrators Association (NASAA) has voiced strong opposition to the Expanding Access to Capital Act (H.R. 2799), a piece of legislation aimed at enhancing financing access for small firms and entrepreneurs. This opposition is met with concern from private capital market leaders including investment crowdfunding platform operators, who argue that the Act could democratize capital access for everyday Americans and stimulate economic growth.
See: AOIP Advocates for Enhanced Capital Formation and Investment Opportunities for SMEs
- Sponsored by Congressman Patrick McHenry, H.R. 2799 seeks to improve small firms' and entrepreneurs' access to financing and broaden investment opportunities for smaller investors.
- The Act includes provisions for a "micro-offering exemption" allowing securities offerings of $250,000 or less, among other measures to streamline capital formation and investment processes.
- NASAA criticizes multiple titles within H.R. 2799, particularly those facilitating private placement brokers and finders, creating micro-offering exemptions, limiting liability for funding portals, and easing trading of private securities off-exchange. NASAA's opposition may stem from fears of reduced state authority in securities regulation, continuing a history of resistance against federal measures perceived as limiting state powers.
Industry Reaction
Rebecca Kacaba, CEO of DealMaker, criticizes NASAA's opposition, highlighting the Act's potential to expand investment opportunities and drive job creation and economic opportunity, reflecting the broader dialogue on how best to support small businesses and investors in an evolving economic landscape.
NASAA’s opposition to HR 2799 and the Improving Crowdfunding Opportunities Act is concerning. The act serves to expand investment opportunities for everyday Americans. NASAA’s focus appears to be on state rules, rather than the identification of inadequate investor protections for Americans. As the SEC has noted, large investors have a limited focus on smaller companies, but HR 2799 provides [an improved] pathway for smaller investors to finance these businesses. This, in turn, drives job creation and economic opportunity. We continue to support the democratization of access to capital.”
As this debate continues, the perspectives of both investor protection advocates and proponents of democratized capital access will need to balance both safety and growth in the financial markets.
See: UK Changes to HNW Rules Will Impede Access to Capital
Background: The "Improving Crowdfunding Opportunities Act" represents a significant effort to refine and enhance the crowdfunding ecosystem in the United States. By reducing regulatory burdens, clarifying the roles and liabilities of funding portals, and expanding the opportunities for both issuers and investors, the Act aims to make crowdfunding a more attractive and viable option for raising capital. These changes could lead to increased innovation, support for small businesses, and broader investment opportunities for the general public, contributing to economic growth and the democratization of investment.
Importance
The debate over H.R. 2799 underscores a critical tension between state-level investor protection efforts and the push for federal legislation to facilitate broader access to capital and investment opportunities. The outcome of this legislative process could significantly impact capital formation, investment opportunities, and economic growth, making it a matter of keen interest for all stakeholders in the financial and entrepreneurial ecosystems.
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
| | |
|---|---|---|
| | |
