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
Podcast: Requirements for a fully functional CBDC
OMFIF | Aug 3, 2021
Charles Kerrigan, partner at CMS Law, and Seokgu Yun, founder and chief executive officer of Sovereign Wallet Network, join John Orchard, CEO of OMFIF, to discuss privacy concerns associated with central bank digital currencies, how policy-makers can address these and the challenges of launching a CDBC. As well as this, they share their perspectives about the underlying technology and set of features necessary for programmable money, an idea gaining momentum but which is often misunderstood. They also touch on the most significant trade-offs between design choices and briefly discuss how to build a CBDC that can adapt to future needs.
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Other links:
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BIS Research: CBDCs beyond borders: results from a survey of central banks
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The Good, the Bad and the Ugly of Central Bank Digital Coins (CBDCs)
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FFCON21: May 13 Central Bank Digital Currencies CBDCs - The Future of Money
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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What is the best secure messaging app?
NordVPN | Emily Green | May 25, 2021
The world's most popular messaging apps
While encryption and privacy play a vital role in selecting which messaging app to use, its also nessesary to use the messaging apps that our friends use. According to Statista (2019) WhatsApp, Facebook Messenger, and WeChat, remain the world's most popular messaging apps despite Facebook's questionable privacy practices.
See: WeChat live Streaming pumps life into local business in China
- WhatsApp is used by almost 90% of people in most countries. In fact, there are only 25 out of 195 countries where WhatsApp isn't the most used messaging app.
- 88% of the US use Facebook Messenger, whereas over half of Latin Americans opt for WhatsApp.
- Most of the world is using a messaging app owned by Facebook. In fact, there are only 10 countries in the world where Facebook-owned messaging apps, are not the market leader.
- WeChat is used by the majority of people in China, since apps like WhatsApp and Facebook Messenger are banned. While Telegram, known for its tight privacy controls, has struggled to find the same mass appeal – with most of its users being based in the middle east.
- Security and privacy within messaging apps is becoming more important, with secure chat-apps like Wire, Threema, and Silence, being the latest additions to the market. If security is your first point of call over popularity, then read on.
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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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ISED: Cyber Security and Policy Statements
Government of Canada ISED | Jul 12, 2021
COVID-19 has had a profound impact on our country and the world. This uncertain environment is ripe for exploitation by threat actors seeking to advance their own interests. Canada's security and intelligence organizations, the Communications Security Establishment (CSE) and its Canadian Centre for Cyber Security (the Cyber Centre), and the Canadian Security Intelligence Service (CSIS), recognize these unique conditions and have developed a complementary approach to mitigate these threats.
In fall 2020, Innovation, Science and Economic Development Canada (ISED) released a policy statement highlighting the importance that the Government of Canada places on safeguarding Canadian research. This is especially relevant given the increased targeting of COVID-19 related research during the pandemic. The policy statement – that can be found here – was accompanied by letters sent to the granting councils and the Canada Foundation for Innovation (CFI) emphasizing the shared responsibility to protect Canada’s research.
See: FFCON21 On-demand video: Fireside: Building blocks of a security program cloud applications
In spring 2021, ISED followed this COVID-19 policy statement with a similar statement, reaffirming the roles that researchers, research organizations and government all have to play in safeguarding Canada’s research ecosysem. The statement – which can be found here – also asked members of the Government of Canada-Universities Working Group to develop specific risk guidelines to integrate national security considerations into the research partnerships process. These guidelines can be found here, and will better position Canadian researchers, research institutions, and government funders to undertakes due diligence to protect against research security threats.
CSIS and CSE are working in line with their respective mandates to ensure that Canadian businesses, research entities, and different levels of government are aware of the threat environment and that they have the tools and information they need to protect themselves. Read their joint statement here.
Cyber security resources
- Cyber Security Advice and Guidance for Research and Development Organizations During Covid-19
- Don’t take the bait: Recognize and avoid phishing attacks
- Security Tips for Organizations With Remote Workers
- Cyber Hygiene for COVID-19
- Focused Cyber Security Advice and Guidance During COVID-19
Protecting intellectual property from foreign interference and espionage
CSIS has observed an increased risk of foreign interference and espionage due to the extraordinary effort of our businesses and research centres. As a result, CSIS is working with these organizations to ensure that their work and proprietary information remains safely in their control. Its focus is on protecting Canadian intellectual property from these threats - and jobs and economic interests with it. See National security guidelines for research partnerships.
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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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Top 7 Steps for Preventing Loan Application Fraud
Guest Post | Fraud.net | Jun 30, 2021
While some loan applicants default for legitimate reasons, some criminals apply for loans and lines of credit with the intent of maxing them out and not making any payments. Taking steps toward preventing application fraud can reduce the cost of debt default to save you money.
In May 2020, two men were charged with submitting a fraudulent Paycheck Protection Program loan application for a restaurant that had been closed for over two years. As financial institutions process large numbers of applications and work on issuing funds within short deadlines in the context of the PPP, it’s important to remember that loan application fraud is a costly issue.
Consumer debt reached almost $14.9 trillion during 2020 after steadily increasing over the five previous years. With increased activity, comes increased fraud. So, as the market continues growing, implementing new measures to lessen the impact of debt default linked to fraudulent applications should be a priority.
What is loan application fraud?
Many applicants default for legitimate reasons, but some criminals apply for loans and lines of credit with the sole intent of maxing them out and skirting payments.
Some criminals use their own identities to apply for loans, then go off the grid to avoid repaying them. However, stolen or synthetic identities — also known as third-party fraud — remain the preferred method. With third-party fraud, scammers use multiple identities to open different credit lines.
In 2020, identity theft accounted for more than 29% of all fraud reports received by the FTC. Their data revealed a sharp increase in loan application fraud, with auto-loan and lease fraud increasing by 105% between 2018 and 2019. Similarly, business and personal-loan fraud rose by 116% over the same time period.
Federal student loan fraud rose by 188% between 2018 and 2019, representing the fastest-growing identity fraud type.
Furthermore, it’s estimated that more than 10% of accounts considered bad debt by banks are actually fraudulent accounts.
Top 7 steps for detecting and preventing loan application fraud
Complying with Know Your Customer (KYC) and anti-money laundering best practices reduces fraud risk. Despite this, your loan application fraud prevention and detection efforts should go beyond these baseline requirements. Here are seven measures you can take to reduce risk further.
1. ID verification and facial recognition
A simple step like asking for two or more forms of ID helps prevent application fraud by introducing an additional barrier for fraudsters.
For online applications, you can implement an automated ID verification solution in real-time that requires the user to snap a picture of an ID along with a selfie. Liveliness technology verifies that the selfie is an image of the person and not a snapshot of a photograph. Following that, facial recognition technology verifies that the selfie and ID match.
A simple video call offers another possible alternative. Loan officers ask a few questions to verify the applicant’s identity during the call and make sure they look like their ID photo.
2. Identity data validation
On average, synthetic identity (ID) fraud costs $6,000 per fraudulent account. Criminals who commit synthetic ID fraud use data from different real or fake identities to create a new identity that looks legitimate.
See: How Verifiable Digital Identity Will Protect Your Post-Pandemic Privacy
Cross-referencing identity data with public and private databases helps reveal some inconsistencies and flag synthetic identities. Often, data like a name, date of birth, address, or SSN won’t match records.
3. Financial documents from a bank or employer
Asking applicants to upload bank statements, pay stubs, and other financial documents themselves means there is a risk that they could tamper with these proofs.
Instead, request permission to contact their bank or employer to verify their claims. It offers a reliable way of preventing application fraud since you can validate income, assets, and other financial details.
4. Bank account verification
Bank account verification ensures that applicants can access the bank account they plan on using to make payments and protect personal information.
Ask for the account information and make a micro-deposit, usually ten to fifty cents. This step verifies the existence of the bank account. Furthermore, asking the applicant for the exact amount of the micro-deposit ensures they have access to the account.
5. Knowledge-based authentication
Knowledge-based authentication assists with application fraud prevention by going beyond the data points a criminal could steal or spoof.
See: 6 lessons on online privacy and digital authentication
Use an applicant’s credit report to generate multiple-choice questions only they would know the answer to. For example, include questions about previous addresses, other lines of credit, or past vehicle purchases.
6. Phone and social media verification
You can send a push notification through your app to perform out-of-band verification. This step verifies that the phone is a physical device registered to a mobile network and not a VoIP number.
Moreover, social media verification helps confirm an identity’s legitimacy based on social media activity and connection with other users. If an applicant uses a fake identity, their social media presence might be nonexistent. Or, they lack the usual kind of pattern for profile connections in the same geographic area.
7. Identity risk scoring
Machine learning-based solutions, like the one Fraud.net offers, analyze multiple data points and cross-reference information with different databases. This approach helps flag identities that have been stolen in the past and detect synthetic identities with data points taken from multiple stolen identities.
In addition, machine learning solutions look at past account activities, establish links with other loans or credit lines that were defaulted on, and analyze geolocation data to spot any discrepancies in fraud detection.
The Fraud.net machine learning solution helps with preventing application fraud by generating a risk score that indicates the likelihood that the application is fraudulent so loan officers can prioritize high-risk applications and perform additional identity verification steps if needed.
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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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S.Africa crypto exchange, Africrypt, brothers disappear after $3.6 billion client cash vanishes, lawyers say
Reuters | Tim Cocks | Jun 26, 2021
JOHANNESBURG, June 25 (Reuters) - Lawyers for investors in a cryptocurrency exchange in South Africa, which told clients in April their accounts had been hacked, say $3.6 billion has disappeared from the platform and that the two brothers who ran it cannot be traced.
If confirmed, Africrypt's losses would rank among the biggest crypto losses yet. For the whole of 2020, losses in the crypto sector through fraud and other crime were $1.9 billion, down from a record of $4.5 billion in 2019, according to crypto intelligence company CipherTrace. read more
See: Bitcoin rises as UK financial watchdog bans Binance cryptocurrency exchange
Africrypt COO Ameer Cajee said in a letter to clients, dated April 13, that client accounts had all been compromised due to a recent breach in its system.
The letter, reviewed by Reuters, said Africrypt had halted operations and had "begun the process of attempting to retrieve stolen funds."
It gave no details of how much money was missing and warned clients that trying to get their money back using lawyers would "only delay the recovery process."
Hanekom Attorneys, a law firm hired by some of those who say they have lost money, told Reuters in a statement their investigations had so far found a total of $3.6 billion had vanished from Africrypt. The firm did not immediately respond to a request for comment on how it reached that figure.
Reuters could not reach Africrypt for comment. Calls to Cajee's mobile phone went to voicemail and he did not respond to text messages. The exchanges's website is offline.
Darren Hanekom, a lawyer representing the investors, said that Cajee and his brother and co-founder Raess had been untraceable since the April 13 letter and that he had referred the matter to South Africa's specialist anti-corruption police, nicknamed the Hawks, on April 16.
See: With Cyberattacks on the Rise, Revolut Explains why Cyber Insurance is Necessary
Philani Nkwalase, spokesman for the Hawks, said they had so far been unable to open the case because Hanekom Attorneys is based in Western Cape and those seeking to recover their money are in other provinces.
"We advised those individuals to please open cases where they are," he said by telephone. "Go to the nearest police station."
Zakira Laher, Cajee's cousin, who said she was an Africrypt director until she quit in 2019, told Reuters the brothers had been missing since April.
"I say this on behalf of the whole family that we have no idea where they are," she said by telephone. "Around about mid-April, they just stopped talking to us. They're not responding to us in WhatsApp."
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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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How Corporations Are Protecting Themselves From Fraud
Guest Post | Jun 17, 2021
Although smaller businesses are more likely to be targeted by cybercriminals, large corporations are having to employ much tougher defences. That’s because they deal with more financial resources, more data, and higher customer expectations. As a result, they are investing in the technologies and the people that make it easier to detect the increasingly sophisticated frauds and scams that cybercriminals use.
See: Comparison of UK banking providers’ fraud controls
The key is to make it as difficult as possible for fraudsters to receive payments, and there are multiple methods of avoiding those payments or recognizing when a fraudulent payment has occurred. Learning lessons from large corporations makes it easier for smaller businesses to recognize where they can implement their own fraud defences.
Employee Training
The first step to any kind of online security is to ensure that team members are kept up to date with risks and warning signs. Every member of the team, no matter their department, needs to be aware of the online safety procedures and the detected fraud process of the company. They also need to know the specific threats that their role might be expected to be faced with. While basics such as password management should already be part of your online security policy, even staff training on how they use their personal email and social media accounts when discussing work should be a regular part of the company calendar.
Secure Customer Payment Systems
There are a variety of ways to ensure customer payments are protected from fraud. To prevent fraudulent refunds, there is a range of valuable email scanning tools that corporations use to detect and then block any emails that come from unknown domains or that come with malicious content. Also more common to see being implemented is a fraud verification process that uses consumer identity and AI to keep businesses safer.
Additionally, the larger a business, the more need there is for a rapid alerting system that lets team members know that a new destination account has been introduced that has never been used for an issued payment. The final must-have for more secure client payment systems is a firmly established emergency protocol, where there is a very clear set of steps towards recovery.
Supplier Onboarding Processes and Payments
The onboarding process for new suppliers should have a set series of steps that need to be followed regardless of internal pressure. All new suppliers need to come with a valid email address and a single phone number that a relevant team member can use as needed. When it comes to payments to suppliers, each stage needs to be documented, whether those are one-off payments or recurring ones. There also needs to be a system in place that makes it easier for employees to handle a lack of the usual authorizations when there is an urgent situation. Finally, any changes to billing details from existing suppliers need to be validated using the already collected contact details.
Although fraudsters and cybercriminals use both traditional and cutting-edge methods for committing fraud, there are more tech solutions than ever before. By watching the technologies and processes that the biggest corporations use, smaller brands can identify which can be implemented into their own business strategies. When no business is immune to fraud attempts, knowing how to detect and avoid fraud is as important now as it’s ever been.
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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InsurAce Founder at DeFi Insurance Protocol Explains the Difference between Traditional and Decentralized Insurance
Crowdfund Insider | | Jun 7, 2021
We recently connected with Oliver Xie, the Founder at InsurAce, a DeFi insurance protocol, that is introducing multi-chain insurance services on its Ethereum dApp (app.insurace.io), in order to offer insurance coverage to protocols and blockchain platforms like Ethereum, Binance Smart Chain (BSC), Huobi Eco Chain (HECO), Solana, Polygon, and Fantom.
Crowdfund Insider: Smart contract vulnerabilities have led to millions of dollars in losses for many project developers and token holders. It may be a good idea to offer insurance coverage, however, why would it be better if it were decentralized (considering InsurAce is a decentralized insurance protocol)?
Oliver Xie: Definitely there are insurance providers offering insurance products and services in a traditional, centralized manner. They operate as an insurance corporation instead of as a DeFi protocol. I wouldn’t say that the DeFi insurance protocol will take the place of these centralized providers, however we can never ignore the advantages of building this as a decentralized platform which can be disruptive.
See: With Cyberattacks on the Rise, Revolut Explains why Cyber Insurance is Necessary
Some of the benefits are:
- Permissionless: users only need a crypto wallet to access the insurance service and users take the full ownership of their assets.
- Smart Contracts Driven: the insurance services are wholly built with smart contracts on public blockchains, which brings with it the various merits of blockchain technology such as robustness, transparency, traceability, privacy protection, and etc.
- Seamless Integration with DeFi Ecosystem: with our insurance solution built as a DeFi protocol, we can work as a building block of the DeFi Lego, and integrate with other DeFi protocols more closely and easily.
- Community Driven: this is one of the most important factors for our growth, we have strong support from our community, and we will gradually build up our DAO to govern the operation and development of the protocol. We build things from the community, of the community and for the community.
With these considerations, we think it is natural that we build it in a decentralized manner.
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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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