OFAC recommendations for virtual currency industry participants
From sex to free speech, what goes online is increasingly up to financial companies
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
Microsoft announces plan to cut cybersecurity workforce shortage in half by 2025
CNBC | Lauren Feiner | Oct 28, 2021
Microsoft will partner with community colleges across the U.S. and provide free resources in an attempt to help end a shortage of cybersecurity workers, the company announced Thursday.
The company believes it can reduce the country’s workforce shortage by half by 2025. It aims to help train and recruit 250,000 people into the cybersecurity workforce by then.
“We think we can make a meaningful difference in solving half of the cybersecurity jobs shortage,” Microsoft President Brad Smith said in a press conference Thursday, adding that “we should be optimistic that in the next 12-24 months we can start to make a real dent.”
See: Magnetic North: How Canada Holds its Own in the Global Race for Innovation Talent
The company announced it will provide a free curriculum to community colleges across the country, provide training for faculty at 150 community colleges and give scholarships and resources to 25,000 students as part of the effort.
Smith said data compiled by Microsoft shows that there is one open cybersecurity job for roughly every two that are filled in the U.S. And of all available positions in the U.S., more than one in 20 is a job requiring cybersecurity skills. Microsoft said such jobs pay an average of $105,800 per year and can range from chief information security officer roles to those requiring a mix of IT and cybersecurity know-how.
In addition to addressing the workforce shortage, Smith said the campaign will play an important role in diversifying the industry. Microsoft found that men hold 82.4% of cybersecurity jobs in the U.S. and 80% of those jobs are held by people who are white. According to data compiled by Microsoft, 57% of community college students in the U.S are women and 40% of students identify as Black, African American or Hispanic.
See: How to grow young fintech talent (with the University of Waterloo)
The announcement follows commitments Microsoft made after a White House cybersecurity summit in August with President Joe Biden and CEOs across several industries:
Microsoft said at the time it would spend $20 billion over five years to deliver more advanced security tools and invest $150 million to help government agencies update their security systems and expand training partnerships in cybersecurity.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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OFAC publishes U.S. virtual currency industry guidance for sanctions compliance
Linklaters | Oct 22, 2021
OFAC recommendations for virtual currency industry participants
A U.S. regulator has again reminded the virtual currency industry that it is subject to the same compliance obligations as more traditional industries. Last week, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued specific guidance regarding the application of U.S. sanctions requirements to the virtual currency industry.
OFAC views participants in the virtual currency industry as playing “an increasingly critical role in preventing sanctioned persons from exploiting virtual currencies to evade sanctions and undermine U.S. foreign policy and national security interests.”
See: CSA and IIROC Publish Guidance and Regulatory Framework for Crypto Asset Trading Platform Compliance
As with any sector of the economy, virtual currency industry participants are expected to evaluate a variety of factors in assessing their unique sanctions risks and formulating a risk-based compliance strategy. In the guidance, OFAC identifies the following key measures that virtual currency industry participants should carefully consider in implementing their risk-based compliance programs:
- Geolocation Tools – these tools allow companies to determine the locations of IP addresses, in particular to identify any that are in comprehensively sanctioned jurisdictions; OFAC makes clear that a failure to use such tools could lead to enforcement actions if transactions occur in relation to comprehensively sanctioned jurisdictions.
- KYC Procedures for the Virtual Currency Industry – OFAC recommends that companies perform information gathering throughout a customer relationship’s lifecycle: in connection with onboarding, during periodic reviews, and when processing transactions.
- Transaction Monitoring and Investigation Software – through this technology, companies can determine whether transactions involve certain identifying information that is associated with persons who are either on a sanctions list or are located in a comprehensively sanctioned jurisdiction.
- Sanctions Screening – as in virtually any industry, particularly the financial services sector, OFAC expects the virtual currency industry to implement controls reasonably designed to screen customers and counterparties against sanctions lists
See: Canadian Regulators Bringing the Canadian Crypto Sector to Heel
Looking ahead – the industry is on notice
OFAC’s guidance makes clear that it means to hold all actors in the virtual currency industry accountable, from technology companies to exchangers, administrators, miners, wallet providers, and even traditional financial institutions exploring new virtual currency assets and services.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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U.S. Justice Department Sets Up National Cryptocurrency Enforcement Team
ComplianceX | | Oct 18, 2021
The U.S. Justice Department is creating a national cryptocurrency enforcement team to tackle investigations and prosecutions of criminal misuses of cryptocurrency and to recover the illicit proceeds from these crimes, Deputy Attorney General Lisa Monaco said Wednesday.
The creation of the National Cryptocurrency Enforcement Team, which would be under the supervision of Assistant Attorney General Kenneth Polite Jr., will focus on crimes committed by virtual currency exchanges and mixing and tumbling services, the DOJ said in a statement. The team also would help trace and recover assets lost to fraud and extortion, the DOJ said.
A virtual currency “mixer” or “tumbler” charges customers a fee to send cryptocurrencies to a designated address in a manner designed to conceal the source or owner of the currency.
See:
SEC Empowers Enforcement Staff To Take Immediate Actions To Combat Emerging Potential Problems | Hester Pierce Calls For Clear Regulations
Top US regulator tells crypto exchanges they need to ‘come in and talk to us’
NCET would strengthen DOJ’s capacity “to dismantle the financial entities that enable criminal actors to flourish—and quite frankly to profit—from abusing cryptocurrency platforms,” Ms. Monaco said. “As the technology advances, so too must the department evolve with it so that we’re poised to root out abuse on these platforms and ensure user confidence in these systems,” she said.
The team would combine expertise from the DOJ criminal division’s money-laundering and asset recovery section and its computer crime and intellectual property section, as well as from U.S. Attorneys’ Offices across the country.
NCET also is looking for a leader with experience with criminal investigations and in the underlying technology for cryptocurrency and blockchain.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Speech by Jon Cunliffe: ‘Is crypto a financial stability risk’?
Bank of England | Jon Cunliffe, Deputy Governor, Financial Stability | Oct 13, 2021
Sir Jon Cunliffe, Deputy Governor, Financial Stability, BoE
Jon Cunliffe's Speech Overview delivered at Sibos: Jon Cunliffe looks at the impact of ‘crypto’ on the stability of the UK’s financial system. He says unbacked crypto-assets (eg Bitcoin) and backed crypto-assets for payments (stablecoins) have begun to connect to the financial system. And he talks about how regulators are responding to their rapid growth.
I want to talk today about whether the world of ‘crypto finance’ poses risks to financial stability.
Cryptoassets have grown by roughly 200% in 2021, from just under $800 billion to $2.3 trillion today. They have grown from just $16 billion 5 years ago. $2.3 trillion of course needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at around $1.2 trillion in 2008.
See:
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Moody’s says Crypto regulation a plus for banks, fintechs
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Task Force on Financial Stability: Report release
When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice. They have to think very carefully about what could happen and whether they, or other regulatory authorities, need to act.
At the same time, they need to be careful not to over-react – particularly when faced with the unfamiliar. We should not classify new approaches as ‘dangerous’ simply because they are different. Innovation, technology and new players can tackle longstanding frictions and inefficiencies and reduce barriers to entry. Throughout history, they have been key to driving improvement and to increasing resilience in financial services.
I will give you my conclusions at the outset. Crypto technologies offer a prospect of radical improvements in financial services. However, while the financial stability risks are still limited, their current applications are now a financial stability concern for a number of reasons.
Cryptoassets are growing fast and there is rapid development of new applications for the technology. The bulk of these assets have no intrinsic value and are vulnerable to major price corrections. The crypto world is beginning to connect to the traditional financial system and we are seeing the emergence of leveraged players. And, crucially, this is happening in largely unregulated space.
Unbacked cryptoassets
Unbacked cryptoassets make up nearly 95% of the $2.3 trillion.
They are essentially non-replicable strings of computer code that can be owned and transferred without intermediaries. Bitcoin, of course, is the most prominent example, but there are now nearly eight thousand unbacked cryptoassets in existence. These have no intrinsic value – that is to say there are no assets or commodities behind them: the value of the cryptoasset is determined solely by the price a buyer is prepared to pay at any given moment. As a result, their value is highly volatile.
See: World Economic Forum (WEF) Warns of Cyberattack that will Collapse Existing Financial System
And while retail investment predominates in this market, there are signs of growing institutional investor interest, with these investors now thinking about whether to have crypto in their portfolio. More complex investment strategies are beginning to emerge, including crypto futures and other derivatives.
At the same time, core wholesale finance and financial market infrastructure firms are putting their toes in the water. Several global banks are offering, or are planning to offer, digital asset custody services. Some international banks have started to, or are looking at, trading cryptoasset futures and non-deliverable forwards; and offering wealth management clients cryptoasset investments, following client demand. Others have developed exchange platforms facilitating matched trades, or offer customers access to other crypto exchanges through their apps. Leading payment firms are also exploring ways of allowing people and businesses to use certain stablecoins for payments and for the settlement of transactions within their networks.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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‘Evolved Apes’ NFT creator Evil Ape disappears with $2.7M
PC Gamer | | Oct 14, 2021
Image credit: Evolved apes
Buyers got their NFTs, but a promise of a fighting game built around them went up in smoke.
Evolved Apes is a collection of 10,000 unique NFTs available for purchase on the NFT marketplace OpenSea. Each of them was also meant to be a character in an Evolved Apes fighting game, in which NFT owners would pit their apes against one another in battles for Ethereum cryptocurrency rewards (just as ancient hominoids did thousands of years ago, as I understand).
See: Kraken Report: Non-Fungible Tokens (NFTs): Redefining Digital Scarcity
But it's all gone disastrously off the rails:
According to a Vice report, one week after Evolved Apes went live, the head of the project vanished, taking 798 Ether—worth roughly $2.7 million—with them.
The money was raised through the sale of NFTs, and was expected to be used to support the development and marketing of the game. But the situation started to look sticky in September, according to the report, as project leaders began to fall off the radar and communications grew erratic. It also came to light that the artist on the project hadn't been fully paid, and winners of a social media contest hadn't been given their NFT prizes.
Backers eventually asked Mike_Cryptobull, a member of the community who spent a little over $10,000 on 20 Evolved Ape NFTs, to investigate the situation and compile a report on what exactly had happened. In it, he said that Evil Ape, the aptly-named administrator of the project's blockchain wallet (whose real identity isn't publicly known), had disappeared, taking the money with him. The official Evolved Apes Twitter account and website are also gone.
There is no mention about the pursuit of criminal charges in either Mike_Cryptobull's report or the Vice story, in part because it's not completely clear that a crime has been committed. According to Jdmjem, an administrator of the Fight Back Apes Discord, police reports were filed in the UK, where the Evolved Apes crew is based, but while there is "definitely an aspect of a scam," there may not technically have been one.
See: Ways NFTs Can Reinvent Your Small Business
"The thing is that everyone did get what they paid for, an NFT," they said in an email sent to PC Gamer. "At the end of the day any promises of a game or other development fall out of the scope of your purchase."
"People are trying to file police reports but [the] problem is this is unknown turf and while unethical not technically illegal. We all got what we paid for."
There are still questions about the unpaid artist and contest winners, but the matter is further complicated by jurisdictional issues—the NFT market is international, and Evolved Apes purchases come from all around the world—and the fact that individual reports are for much smaller amounts than the sum total, and thus aren't likely to garner much attention or traction from police agencies.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Plastic Policemen: Credit-card firms are becoming reluctant regulators of the web
The Economist | Oct 10, 2021
From sex to free speech, what goes online is increasingly up to financial companies
WHO SHOULD police the internet? For some time now the question has tied companies, regulators and campaigners in knots. Social networks spend billions moderating content posted on their platforms, but are still criticised either for not removing enough toxic material or for stifling free speech. They are not the only ones to grapple with the problem. Banks and credit-card companies too are finding themselves playing a bigger role in what is said and done in the public square—to their, and their customers’, discomfort.
See: Bank of Canada to become new regulator of fintech companies doing payments processing
Now the boundary of censorship is being extended further, into the pornography business. From October 15th adult websites worldwide will have to verify the age and identity of anyone featured in a picture or video, as well as the ID of the person uploading it. They will need to operate a fast complaints process, and will have to review all content before publication. These requirements are being imposed not by regulators but by Mastercard, a credit-card giant.
Websites can always choose not to work with Mastercard. But given that the company handles about 30% of all card payments made outside China, to do so would be costly. Visa, which manages a further 60% of payments, is also taking a firmer line on adult sites. And the trend goes beyond porn. In the shadier corners of the web, and in industries where the law is unclear or out of date, financial firms are finding themselves acting as de facto regulators.
Payments have become a tool of domestic and international policy,” says Aaron Klein of the Brookings Institution
Since the turn of the century, “payments have become a tool of domestic and international policy,” says Aaron Klein of the Brookings Institution, a think-tank. After the 9/11 attacks of 2001 America introduced new anti-money-laundering rules and more targeted sanctions. This system—a “21st-century precision-guided munition”, as a former head of the CIA called it—obliges financial firms to block payments to the individuals on a list which today runs to 1,604 pages.
See: Payments without banks goes mainstream with Twitter on Bitcoin Lightning Network
Handing enforcement duties to companies relieves the taxpayer of some of the cost. Compliance departments at firms, meanwhile, have ballooned. It is not unusual for big banks, such as HSBC or JPMorgan Chase, to employ 3,000-5,000 specialists focused on fighting financial crime, and more than 20,000 overall in risk and compliance. In 2017 Accenture, a consultancy, reckoned that tech firms employed around 100,000 content moderators.
Payment companies in particular face a philosophical dilemma.
“On one hand they try to be very open, accepting, willing to facilitate payments for whomever. They’re not taking any sort of political or moral stance,” says Lisa Ellis of MoffettNathanson, a research firm. “But on the other hand, they also feel like they have a very strong responsibility in making sure that they’re not aiding and abetting any sort of crime.”
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Forward Security Earns Select Tier Consulting Partner Designation from Amazon Web Services program
FWD Security | Release | Sep 28, 2021
Forward Security Inc., a Vancouver-based application & cloud security consulting company, is proud to announce that it has earned the Select tier Consulting Partner designation from Amazon Web Services (AWS) through the AWS Partner Network (APN) program.
"We are very excited to be recognized as a Select tier Consulting Partner in the APN. Strong partnerships such as this enable us to deliver best-in-class application & cloud security consulting services to both AWS and Forward’s clients," said Farshad Abasi, CSO and Founder of Forward Security.
Founded in 2018, Forward's highly accomplished team delivers Cybersecurity solutions with focus on application and cloud security to mid-sized organizations in the Finance, Health, E-commerce, and Technology sectors. Services range from security risk assessment and pentesting, to DevSecOps and training, delivered by a team who has experience with some of world’s largest organizations such as HSBC, Intel, HP, and Motorola all the way to medium sized enterprises and even local start-ups. Forward’s Security Consultants have software development backgrounds and work closely with client’s teams to tackle security following a systematic approach, leveraging standards based and repeatable processes.
See:
ISED: Cyber Security and Policy Statements
Fintech Fridays Podcast EP52: Technology Due Diligence Process and Cyber Security Risks
Forward Security’s Select tier Partner Status represents a high level of expertise with AWS, and will contribute to helping customers design, build, and manage secure cloud solutions on AWS.
“Your Code Security Experts”
Company Contact:
Dennis Oudijk
Director of Business Development
& Strategic Alliances Forward Security Inc. Phone: 604.505.6894
Email: d.oudijk@fwdsec.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, 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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