Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Cyber Security, Quantum, Hacks, Fraud Alerts, Risks, InsurTech
Metacrime in the Metaverse
Report | Jan 31, 2024
Lifting the Veil of A New Phygital Frontier for Law Enforcement
INTERPOL recently published a whitepaper providing an insightful analysis of the Metaverse from a law enforcement perspective, focusing on the unique challenges and opportunities it presents from use cases, crimes, forensics, investigations, and governance. The Metaverse, a blend of augmented, virtual, and physical realities, offers a new realm where digital transformation in policing can greatly enhance operational efficiency and public safety. However, it also opens doors to novel criminal activities, termed "Metacrime," requiring new strategies for law enforcement and judicial systems to adapt to this evolving digital landscape.
Metacrime
Metacrime refers to a range of criminal activities that emerge within the Metaverse, a digital realm that blends augmented, virtual, and physical realities. These crimes exploit the unique features and capabilities of the Metaverse, extending beyond traditional cybercrimes to include new, unprecedented forms of illegal activity.
See: Economist Impact Report: Unfolding the Metaverse
Metacrimes encompass various illegal activities such as:
- NFT Frauds: Deceptive practices involving Non-Fungible Tokens, including counterfeit NFT creations and sales.
- Cyber-Physical Attacks: Attacks that target virtual representations of physical infrastructure, causing real-world consequences.
- Identity Theft and Impersonation: Stealing digital identities, deepfakes, and impersonating avatars for criminal purposes.
- Theft of Virtual Assets: Illegal acquisition or manipulation of virtual properties and assets within the Metaverse.
- Grooming and Exploitation: Predatory behaviors targeting minors or vulnerable individuals within virtual environments.
- Financial Crimes: Including money laundering and fraudulent transactions using virtual currencies or assets.
Opportunities and Challenges
+ The Metaverse enables advanced training and simulation for law enforcement, creating immersive environments for practicing crisis management and tactics without real-world risks.
+ It also facilitates virtual meetings and operational coordination, offering platforms for information sharing, training, and reconstructing crime scenes virtually for better situational awareness.
See: AI and the Metaverse: The Imperative for Rules and Regulations
- Metacrime includes various illegal activities like NFT frauds, cyber-physical attacks, impersonation by theft of digital identities, theft of virtual assets, grooming of children, and more. INTERPOL's white paper stresses the necessity for a standardized approach to address these challenges, as the Metaverse encompasses multiple jurisdictions and legal ambiguities.
- The Metaverse also presents unique challenges for evidence collection and crime investigation. Traditional physical evidence is replaced by digital interactions, necessitating law enforcement to adapt to new methods for collecting and analyzing digital evidence, such as endpoint forensics, server investigations, and blockchain analytics.
Metacrime poses unique challenges to law enforcement due to the Metaverse's lack of standardized protocols, its decentralized nature, and the blending of digital and physical realities that may cross multiple legal jurisdictions. Addressing Metacrime requires new forensic techniques, international cooperation, and a deep understanding of emerging technologies and virtual environments.
Outlook
The collaborative effort between INTERPOL, government bodies, and private sectors is essential in shaping a secure Metaverse. This pioneering effort by INTERPOL is a significant step towards tackling the complexities of Metacrime, ensuring a safer and more secure digital world.
See: Gensler’s Remarks at 2023 Securities Enforcement Forum
Despite its challenges, the Metaverse offers significant opportunities for law enforcement, including advanced simulation for training, virtual crime scene preservation, and immersive training platforms. These advancements can potentially transform law enforcement practices and improve efficiency and effectiveness.
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 Importance of Business Strong Security Measures
Jan 29, 2024
Image by macrovector on Freepik
IT security is more crucial than ever for businesses. As we increasingly rely on integrated computer systems and cloud-based data storage, the risk of cyber threats disrupting operations or compromising sensitive information is on the rise. To tackle this, implementing robust security measures through technologies like firewalls and employee training is essential. The numbers and sophistication of cyber-attacks are growing each year, posing a rising risk to businesses of all sizes.
Numbers are Growing
The number and sophistication of cyber attacks on businesses continue to grow exponentially each year. Phishing scams, ransomware, data breaches, and other threats pose a rising risk to companies of all types and sizes. Attackers have a variety of motivations, from hacking to steal financial data or intellectual property to implanting viruses that could hamper IT systems. No business can assume they are immune from the expanding threat landscape.
Let's face it: you probably need to improve your IT security. No business should be kicking back thinking they're immune from this expanding threat landscape.
Compliance Requirements are Increasing
Governments and industry regulators around the world are enacting stricter IT standards and compliance requirements to compel businesses to enhance their cybersecurity safeguards. Examples include the EU’s General Data Protection Regulation, which requires protecting individuals’ private information, and industry-specific rules for the protection of sensitive customer data in sectors like healthcare and finance. If businesses fail to meet compliance requirements, they face substantial financial penalties and loss of consumer trust.
The Costs of Attacks are Rising
Data breach attacks can bring an unprepared business to its proverbial knees. A company may need to pay a large ransom to regain control of its systems. But even more concerning are downstream costs like computer system repairs, legal liabilities, falling stock prices, and long-term reputational damage to customers. IBM has stated the average total cost of a corporate data breach was $4.45 million in 2023. The easiest way for businesses to avoid these rising, potentially company-ending costs is through improved IT security on the front end.
Firewalls are Critical Lines of Defense
One of the most vital components for securing a business's IT infrastructure is a properly configured firewall. Firewalls create a barrier between a company's internal networks and external threats online, controlling access and blocking malicious traffic. They provide a first line of defense against hackers, malware, ransomware, and other external attacks. Businesses without an enterprise-grade firewall or equivalently advanced network security technologies leave the door open for cybercriminals to infiltrate their systems. Investing in powerful firewall products and services and setting detailed rules for traffic allowed in and out should be standard practice. Regular firewall software updates and patches are also essential for addressing new security vulnerabilities that arise. The risks posed by emerging cyber threats only increase over time without robust firewall protections across on-premises and cloud-based networks. Just as every home needs locked doors and perimeter alarms, every business relying on online data requires an advanced firewall guarding its digital borders.
See: Fintech & Cybersecurity: Key Risks and Solutions
Simply put, neglecting to invest in IT security puts companies at tremendous and unnecessary risk. Both malicious cyber threats and compliance requirements will only expand in the coming years. Implementing regularly updated security tools, providing employee education, monitoring for intrusion attempts, and maintaining comprehensive incident response plans are essential steps that all modern businesses should take to protect their data and computer infrastructure. The threats are real and substantial. But so, too, are the solutions available for securing business technology today. Those companies that embrace strong IT security will have a major competitive advantage.
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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SEC’s Escalating Crypto Enforcement
Crypto Report | Jan 24, 2024
Image: Cornerstone Research
SEC Intensifies Crypto and Digital Asset Oversight in 2023
As highlighted in a comprehensive report by Cornerstone Research (view release), in 2023, the U.S. Securities and Exchange Commission (SEC) intensified its regulatory oversight and enforcement of crypto reflecting a strategic prioritization of digital asset market regulation under the leadership of Chair Gary Gensler.
See: CSA Consultation on Public Investment Funds and Crypto Assets
- The SEC executed 46 enforcement actions against various digital asset market participants in 2023, a 53% increase from the previous year and the highest number since 2013.
- These actions comprised 26 litigations in U.S. federal courts and 20 administrative proceedings, indicating a broad scope of regulatory reach.
- Of the 46 enforcement actions, 26 cases (57% of the total) involved allegations of fraud.
- 28 of these actions (61% of the total) were related to claims of violations concerning unregistered securities offerings.
- The SEC levied a cumulative total of approximately $2.89 billion in fines and penalties against participants in the digital asset market.
Outlook
Gary Gensler's enforcement trend is likely to continue as the SEC maintains its focus on investor protection and market integrity. Crypto entities and investors must adapt to the emerging regulatory landscape to mitigate risks and ensure compliance.
Download the 29 page PDF --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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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ASC Sanctions Devon Christopher Edwards & KB Crypto
Crypto Enforcement | Jan 22, 2024
Image by DilokaStudio on Freepik
ASC Sanctions Devon Christopher Edwards and KB Crypto Inc. for Securities Misconduct
CALGARY, AB, Jan. 16, 2024 - The Alberta Securities Commission (ASC) has recently taken decisive action against Devon Christopher Edwards and KB Crypto Inc. for violating Alberta's securities laws. The case, which has drawn significant attention in the financial community, highlights the ongoing efforts of regulatory bodies to maintain the integrity of the capital markets.
- Edwards and KB Crypto Inc. admitted to distributing securities without a prospectus and operating as a dealer without registration, contravening the Securities Act.
- From February 2021 to November 2022, they raised nearly US$450,000 from 75 investors through investment contracts. These contracts involved using investors' funds to purchase and trade in contracts for difference (CFDs), without filing a prospectus or relying on any exemptions.
See: Canadian Regulators Set Expectations for Crypto Asset Investment Funds: A Comprehensive Overview
- The ASC panel ordered Edwards to pay a $40,000 administrative penalty and $10,000 in costs. He is also required to resign from any director or officer positions in any issuer. For five years or until the penalty is fully paid, Edwards is barred from acting as a director or officer in any issuer, advising in securities and derivatives, and from trading or purchasing any security or derivative (with limited exceptions).
- The company is permanently prohibited from trading, purchasing, or advising in securities or derivatives. All trading or purchasing of its securities or derivatives must cease.
Conclusion
The Alberta Securities Commission's decisive action against Devon Christopher Edwards and KB Crypto Inc. underscores the importance of adhering to securities laws and the serious consequences of non-compliance. This case highlights the regulatory body's commitment to protecting investors and maintaining the integrity of the financial markets.
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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Evolving Banking Landscape: Asset Shift, Interest Rates, Distribution
Report Insights | Jan 18, 2024
Image by Freepik
In a recent episode of The McKinsey Podcast, senior partners Alex Edlich and Reinhard Hüll, along with editorial director Roberta Fusaro, delve into the findings of McKinsey's 2023 Global Banking Annual Review. The discussion centers on the evolving landscape for banks, highlighting the profitable yet challenging period for the global banking industry. Below we highlight the key trends on the changing landscape for banks have significant implications for fintechs and investors.
Key Trends and Insights
1. More than half of the $402 trillion in global financial assets is not on bank balance sheets
The report underscores a major asset shift in the banking sector: a substantial portion of assets, over $402 trillion globally, now resides outside traditional bank balance sheets. This transition, largely towards mutual funds, insurance, pension funds, and private capital, marks a significant change in the financial ecosystem.
See: Open Banking: Revolutionizing Financial Data Sharing
- There's a vast opportunity for fintechs to innovate in areas like asset management, insurance, pension funds, and private capital. Fintechs can leverage their agility and technological prowess to create solutions that cater to this shift.
- Shifting assets across geographies suggests that fintechs and investors should consider a global perspective. Markets like the Indo-Crescent region are emerging as hotspots for banking performance, which could be fertile ground for fintech innovation and investment.
2. Rising interest rates have boosted banking sector profits by about $280 billion in 2022
While rapidly rising interest rates has resulted in the higher profits for the global banking industry (best period since 2007), it's crucial for banks to recognize and adapt to the ongoing structural and macroeconomic changes, and look to evolve with market dynamics. The rise in interest rates also presents an opportunity for fintechs.
See: Minerva & Equifax Canada Partner on AML Solutions
- They can develop financial products that capitalize on these higher rates, offering more attractive returns to their customers. By integrating advanced technologies into their services, fintechs can enhance customer experience, improve operational efficiency, and offer innovative products.
- "We’re talking about gen AI and stuff you can implement pretty quickly."
3. Up to 30 percent of distribution in retail banking going via third parties
The podcast also touches on the increasing role of consumer digital payments and embedded finance, indicating a shift towards more mobile and web-based banking interactions. This transition necessitates banks to rethink their distribution strategies, potentially leveraging third-party platforms and enhancing their technological capabilities.
- The move towards digital payments and embedded finance, with a significant portion of retail banking distribution going through third parties, opens new avenues for fintechs. They can position themselves as key players in these channels, offering seamless and integrated financial services.
- As the banking sector grapples with various risks, including those associated with technology and cyber threats, fintechs that offer solutions in risk management, cybersecurity, and compliance will be increasingly valuable. Investors should look for companies that are strengthening the financial sector's resilience to these challenges.
So What Should Banks Do?
Prioritize technological integration and innovation, focusing on digital transformation and customer-centric services. Embrace the shift towards digital and mobile banking, leveraging AI and data analytics to enhance customer experience and operational efficiency.
See: Canadian Banks Face Scrutiny Over Sustainability Claims
Actively explore partnerships with fintechs to stay ahead in the rapidly evolving financial landscape, ensuring our bank remains competitive, resilient, and adaptable to the changing needs and behaviors of our customers. This strategic focus is not just about keeping pace; it's about leading the industry into its next chapter.
And What Should Fintechs Do?
Fintechs should focus on strategic collaborations and niche market innovation. Capitalize on your agility and technological edge to create solutions that address gaps in traditional banking, particularly in areas like digital payments, personalized financial services, and cybersecurity. Forge strategic partnerships with established banks to gain scale and market access, while maintaining your innovative spirit. This approach will not only enhance your value proposition but also position you as indispensable players in the evolving financial ecosystem, driving the future of finance through innovation and customer-centric solutions.
Outlook
With over half of global financial assets moving outside traditional bank balance sheets, rising interest rates boosting profits, and a significant shift towards third-party distribution channels, the landscape is rapidly evolving. These trends not only challenge the status quo of traditional banking but also open up unprecedented opportunities for fintechs and investors.
See: Discover the Future of Finance with Michael King’s “Fintech Explained”
In conclusion, the future of banking and finance is being rewritten, with technology and innovation at its core. Both banks and fintechs have pivotal roles to play in this new era. For investors, this represents a landscape ripe with opportunities for those who can navigate these changes effectively. As the industry continues to evolve, the focus should be on adaptability, innovation, and strategic collaboration, driving the future of finance through customer-centric solutions and technological advancements.
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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Minerva & Equifax Canada Partner on AML Solutions
Partnership | Release | Jan 17, 2024
Image by rawpixel.com on Freepik
Minerva Launches Channel Partner Program with Equifax Canada to Enhance AML Solutions
TORONTO, January 17, 2024 - Minerva, a trailblazer in AML technology, has announced the initiation of its channel partner program. This strategic development includes Equifax Canada, a global leader in data, analytics, and technology, as its inaugural partner. This collaboration is set to expand the accessibility and capabilities of Minerva’s AML compliance technology.
See: Financial Institutions and Regulators Alike are Showing Growing Interest in Fintech and Regtech Solutions.
Minerva, renowned for its proactive AML platform, is instrumental in identifying client risks from the initial onboarding stage through to exit, aiding top compliance teams in preempting financial crime. The company's clientele spans prominent financial organizations and enterprises across the US and Canada, including names like MOGO, SBI Canada Bank, and Coinbase.
The channel partner program is designed to provide partners and their customers with direct access to Minerva’s state-of-the-art AML risk assessment solutions. These solutions are crucial for ensuring compliance with evolving regulations and for proactive protection against financial crime. The program is tailored for organizations that aim to resell, cosell, integrate, or refer Minerva’s AML solutions, enhancing their customer relations and market presence.
Equifax Canada, the first partner in this program, is a powerhouse in providing unique data and analytics solutions, powered by advanced cloud technology. This partnership will enable Equifax Canada’s customers to leverage Minerva’s advanced AML solutions, furthering their commitment to combat financial crime.
See: OSC Publishes TestLab 2022 Report: Exploring Innovations in RegTech with Participate Solutions
Jennifer Arnold, co-founder and CEO of Minerva:
“After a year of meticulous planning and collaboration to provide best in class solutions for our customers, we have now formalized our partnership with Equifax Canada. Together, we are poised to deliver an unrivaled AML compliance and fraud protection offering. By coupling Equifax Canada’s robust customer relationships and fraud expertise with our sophisticated AML compliance solutions, Canadian businesses will now be even more empowered to thrive in a secure financial environment.”
About Minerva
Minerva stands as a RegTech leader, founded by AML industry experts, aimed at transforming AML compliance. The company’s proactive platform employs advanced deep learning models and neural networks to analyze data across multiple languages, aiding compliance teams in staying ahead of financial crime. Minerva’s platform is adept at creating detailed customer profiles and predictive risk analyses in real-time, making it a trusted partner for financial institutions seeking swift and accurate risk assessment results. For more information, visit gominerva.com.
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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Celsius Creditors to Return Funds Withdrawn Pre-Bankruptcy
Crypto News | Jan 10, 2024
Celsius Asks Creditors to Return Funds Withdrawn Within 90 Days Pre-Bankruptcy
Celsius, a cryptocurrency lending platform, is in the midst of a major financial restructuring following its bankruptcy declaration. The company is now requesting certain creditors who withdrew large sums in the months leading up to the bankruptcy to return a portion of their funds. This move is part of a broader effort to manage the company's financial crisis and ensure equitable treatment of all creditors.
See: CDPQ Posts $33.6 Billion Loss (H1 2022) After Writing Off US$150 Million in Celsius Network
- Celsius is focusing on account holders who withdrew over $100,000 in the 90 days before their bankruptcy declaration on July 13, 2022. These individuals are being asked to return 27.5% of their withdrawn amount.
- Those who fail to comply with the request may face legal action. The initiative aims to recover funds for equitable distribution among all creditors. Compliance with the fund return request makes creditors eligible for future distributions under Celsius's reorganization plan.
- Account holders who withdrew less than $100,000 are not required to return funds but must participate in the voting process regarding the reorganization plan.
- The company, along with its founder and CEO Alex Mashinsky, faces lawsuits from regulatory bodies like the SEC, FTC, and CFTC for allegedly misleading customers. Mashinsky is charged with fraud, and Celsius has agreed to a $4.7 billion settlement with the FTC.
Read: Bank of Canada Publishes Analytical Notes on DeFi
The outcome of this situation could set a precedent for how similar cases are handled in the future, impacting investor confidence and the stability of the cryptocurrency market.
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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