Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Digital Identity, Privacy, KYC, AML/ATF
Protecting Financial Privacy in the Digital Age: Crafting a Stronger Framework
Cato Institute | Nicholas Anthony | May 2, 2023
Image: Pixabay/Geralt
- Financial privacy in the United States has been deteriorating over the past 50 years, with the third-party doctrine and Bank Secrecy Act weakening Fourth Amendment protections.
- The Right to Financial Privacy Act, enacted in 1978, provides some protections but is undermined by numerous exceptions. A revised legal and regulatory framework must protect against warrantless searches and seizures.
- Congress should amend the Right to Financial Privacy Act to remove exceptions, requiring government agencies to obtain warrants or subpoenas and notify Americans when accessing their financial information. This is necessary to restore financial privacy, particularly in the digital age.
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See: Financial Privacy: SEC Launches Enormous Database Compiling All Stock Trades
- Several key recommendations to establish a stronger framework for financial privacy in the United States.
- These include removing exceptions to the protections of the Right to Financial Privacy Act, eliminating 26 U.S.C. Section 6050I, strengthening the formal written requests provisions of the Act;
- Repealing the Bank Secrecy Act or at least its customer reporting requirements; R
- equiring inflation adjustments to reporting thresholds;
- Publicly reporting the effectiveness of suspicious activity and currency transaction reports; and
- Enacting protections for two-party transactions, such as peer-to-peer exchanges and self-hosted wallets, to prevent further encroachment of financial surveillance on Americans' privacy.
- Holding cryptocurrency in a “self‐hosted” wallet is merely the digital equivalent of holding physical cash in a traditional wallet. It gives the owner complete control over what’s held inside it and, to the extent that they want to do so, the ability to maintain their privacy. Congress should not let financial surveillance further encroach on Americans’ privacy by being expanded to cover self‐hosted wallets and peer‐to‐peer exchanges.
See: Office of the Privacy Commissioner Announces Digital ID Ecosystem Resolution to Ensure Transparency and Privacy
- It is time to reconsider the third‐party doctrine, the reasonable expectation of privacy, and financial privacy. “Having technology” in the 1970s meant having a television and an electric typewriter. Less than 20 percent of families had a credit card issued by a bank. Today, Americans use credit or debit cards for nearly all purchases, acquire loans directly on their phones, and leave a digital trail nearly everywhere they go. So, while such financial records may have offered only limited insights into one’s life in the 1970s, these financial records now offer a full, detailed representation of one’s life.
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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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TransUnion Offers Credit Scores for DeFi Borrowers Utilizing Crypto Assets
Blockworks | Shalini Nagarajan | Apr 21, 2023
TransUnion’s new crypto-focused service will provide individuals’ credit scores to blockchain dapps when they apply for DeFi loans. Their scores will be based on their real-world credit histories.
- Blockchain data platform Spring Labs and Web3 identity solution provider Quadrata partnered with TransUnion on the initiative. In 2021, TransUnion led a $30 million investment in Spring Labs’ Series B.
- Credit scores in Web3 aren’t a new concept. Quadrata previously partnered with nine DeFi protocols including TrueFi and Cred Protocol to provide KYC and anti-money laundering risk scores.
See: Vitalik Proposes Web3 Credentials of the Future: ‘Soulbound Tokens’
- TransUnion, headquartered in Chicago, enables consumers to obtain their credit data and selectively share it with relevant dapps, ensuring user privacy. This partnership empowers DeFi lenders with crucial information for confident lending decisions, reducing risk and offering borrowers better terms.
- TransUnion's entry into the crypto space strengthens the case for DeFi, especially after the turmoil caused by the Terra collapse and subsequent market sell-offs. The transparent nature of DeFi addresses concerns over unsecured loans that have jeopardized lenders' balance sheets. The integration of TransUnion's identity and credit data into blockchain-based lending enables a balance between risk assessment and user privacy, promoting more lending opportunities while minimizing risk.
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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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Mastercard is Navigating Global Trust Frameworks and Building a Global Digital Identity Network
The Financial Revolutionist | Apr 19, 2023
Mastercard is working to establish a digital-identity network that leverages its international reach and focus on compliance to meet a comprehensive suite of commercial and regulatory use cases.
- In an interview with The Financial Revolutionist, Sarah Clark, Senior Vice President of Digital Identity at Mastercard, explains the end goal of Mastercard’s digital-identity project, describes the privacy and security guidelines Mastercard is following, and justifies a private actor fulfilling this function—rather than a public entity.
- Vision: Mastercard's digital identity project aims to leverage their experience in managing a global payment network to create a network that powers the future of digital identity, where individuals own their own digital identity and share their identity credentials with transparency and consent.
See: Jack Dorsey’s is Building an Extra Decentralized ‘Web5’ on Bitcoin with Digital Identity Layer
- The momentum for digital identity is coming from various high-frequency use cases beyond banking, such as age verification and data privacy, with growing legislation around the world.
- Individual demand: government investment in digital identity like digital driver's licenses are a form of reusable ID that can be leveraged for age verification, KYC, participating in car sharing, home sharing, and other use cases. Those are some examples of the way government investment as well as regulation and common-sense use cases are beginning to happen, and these are going to being to happen at scale, we need the user experience to be as easy as possible and to be as secure as possible.
- Mastercard is working with regulatory stakeholders in pilot geographies such as Australia and the UK, complying with trust frameworks and integrating with government ecosystems.
- Both of those countries have defined what's called a trust framework—the US led by NIST has something similar. We work to become accredited with those types of frameworks, which means the product or platform you’re bringing to market to operate in the world of digital identity is in compliance with the trust framework and the ID proofing methods that are mandated.
- In the US it’s a state-based approach, it's not something where the federal level is creating an all-citizen repository, but rather it's tethered to the existing driver's license ecosystem, so we've looked to plug into that both to ensure that we can pass those digital
- credentials and so that we can validate other pieces of evidence as are applicable according to different trust frameworks.
- As Mastercard continues to expand its global digital identity network, innovative solutions such as those offered by ID document verification by Microblink, are enhancing trust and security in digital transactions. These technologies not only streamline identity verification but also offer a layer of protection against fraud, making them indispensable and contributing to a safer digital environment.
See: Digital Identity Sins
- Privacy preservation and decentralized design are non-negotiable for Mastercard (So data privacy, data minimization, only sharing what's needed), and they aim to ensure global interoperability with different countries' trust frameworks. Mastercard believes that strong public-private partnerships can help build this ecosystem globally and in the commercial sector, creating enormous lift for businesses, people, and governments.
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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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Digital Dollar and Tensions Over Transaction-Monitoring
Bloomberg Law | Andrea Vittorio | Apr 3, 2023
Image: Unsplash/Sander Sammy
While the US government weighs whether to launch a central bank-backed virtual currency, civil liberties advocates and libertarians are pushing for a digital dollar that’s shielded from surveillance and offers similar anonymity to cash.
- Interest in a digital dollar is fueled in part by the advent of alternatives like cryptocurrencies and the coronavirus pandemic-driven shift toward more cashless transactions.
- The privacy a digital dollar affords will depend on design decisions such as how transactions are recorded, how users’ identities are verified, and how virtual wallets work. Details like these would determine how closely transactions could be tracked, either by law enforcement looking out for illicit financial dealings or by private sector firms interested in consumers’ buying habits.
- Digital rights advocates are concerned about the private sector's ability to track and sell consumers' financial data. Brokers can collect transaction data and build profiles that reveal private information about individuals.
See: CBDC Adoption in Africa and Caribbean is Slow. India Piloting CBDC Anyway
- The US is among about 100 countries and currency unions that are exploring the possible use of virtual money issued by a central bank that’s not printed or minted like traditional tender, according to a tracker from the Atlantic Council. Skeptics have dubbed China’s deployment of a digital yuan a “surveillance coin” because it could allow the government to more easily monitor transactions.
- Surveillance fears have prompted Republican policymakers, including House Majority Whip Tom Emmer of Minnesota and Sen. Ted Cruz of Texas, to propose legislation halting any US government efforts to issue a digital dollar directly to Americans in a way that could facilitate financial monitoring.
- The regulation of financial transactions to prevent illicit finance, money laundering, and financing terrorism has made digital transactions less private. The introduction of a digital dollar system could exacerbate the tension between privacy and regulatory functions. Advocates of a "freedom coin" want to prevent undue tracking and surveillance. To balance privacy and illicit finance concerns, tiered reporting requirements could be implemented, but this could make the currency less useful to end-users. Finding ways to reduce such trade-offs with technology is a work in progress.
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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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Financial Privacy: SEC Launches Enormous Database Compiling All Stock Trades
Cato Institute | Jennifer J. Schulp | Feb 17, 2023
Image: Unsplash/Lianhao Qu
What little financial privacy you have when trading stocks is about to get even smaller next month. When you make a stock trade, your broker already is required by the Bank Secrecy Act to maintain records of it, monitor your trading activity, and report any suspicion of illegal activity to the federal government.
- Starting in March, your broker will be required to directly report all of your trades, including your personal information, to a massive government database. If the Bank Secrecy Act concerns you—and even if it doesn’t—just wait until you hear about the Consolidated Audit Trail (CAT).
- The Consolidated Audit Trail is intended to collect and accurately identify every order, cancellation, modification, and trade execution for all exchange‐listed equities and options across all U.S. markets, allowing the Securities and Exchange Commission (SEC) to track orders and identify who made them.
See: Office of the Privacy Commissioner Announces Digital ID Ecosystem Resolution to Ensure Transparency and Privacy
- This massive surveillance database is a financial privacy nightmare: The CAT began collecting trading data in 2020, after years of development replete with challenges and controversies. It is scheduled to begin collecting customer information on March 17, 2023. Although the SEC has limited the scope of customer information to be collected—initial plans called for Social Security numbers, dates of birth, and account numbers—brokers must still provide customer names, addresses, and birth years which allows for easy identification of individual investors.
- Most of the criticism leveled at the CAT has focused on data security. The CAT will absorb information about tens of billions of trades daily, making it quite possibly the largest database in the world. Its sheer size will be an invitation for criminals, who then‐SEC Chair Jay Clayton recognized in 2017 “could potentially obtain, expose and profit from the trading activity and personally identifiable information of investors.”
- The CAT threatens American investors’ privacy. Knowing that the SEC is watching your every trade is too great a cost for easier SEC enforcement. Despite the years of planning and expenses already incurred, the SEC should put the CAT back in the bag—or let it out only when declawed—to protect the liberties of American investors.
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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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Online Age Verification: What It Is & How It Protects Minors
Guest Post | Feb 28, 2023
Image: Freepik
The internet has become an integral part of our daily lives, and it has revolutionized the way we communicate, access information, and do business. However, with the benefits of the internet come challenges and risks, especially for minors. The proliferation of age-inappropriate content and activities on the internet poses a significant threat to the safety and well-being of children. That's where online age verification comes in - it's a tool that helps protect minors from the dangers of the internet
What is Online Age Verification?
Online age verification is a process of confirming a user's age to access age-restricted content, services, or activities on the internet. It requires users to provide proof of their age, such as a government-issued ID, passport, or driver's license, to confirm they are old enough to access the content or service. Online age verification is used for a variety of purposes, including access to adult content, online gambling, and online shopping.
How Does Online Age Verification Protect Minors?
Online age verification is critical in protecting minors from the dangers of the internet. Here are a few ways it does so:
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Restricting Access to Age-Inappropriate Content
Online age verification helps to ensure that minors are not exposed to age-inappropriate content, such as violence, pornography, and gambling. Age verification systems work by requiring users to provide proof of age before accessing such content, making it harder for minors to access such content. By restricting access to such content, online age verification helps to promote the safety and well-being of minors.
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Preventing Children from Engaging in Age-Inappropriate Activities
Online age verification is also essential in preventing minors from engaging in age-inappropriate activities, such as online gambling and social media. By requiring users to verify their age before accessing such activities, online age verification helps to prevent children from engaging in activities that may be harmful to their physical and emotional well-being.
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Reducing the Risk of Cyberbullying and Online Predators
Online age verification can also help to reduce the risk of cyberbullying and online predators. These dangers are prevalent on social media platforms, where minors are particularly vulnerable. By implementing age verification systems, social media platforms can prevent minors from accessing the platform, reducing the risk of cyberbullying and online predators.
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Ensuring Compliance with Legal Regulations
Online age verification is also essential in ensuring compliance with legal regulations. For instance, many countries have laws regulating access to age-restricted content, such as pornography and gambling. Online age verification system helps to ensure compliance with such laws, protecting minors from exposure to such content.
Challenges and Concerns
While online age verification has many benefits, it also has some challenges and concerns. One of the main challenges is the difficulty of implementing a robust and effective age verification system. Some of the challenges include the high cost of implementation, the risk of identity theft and data breaches, and the potential for false verification.
Another concern is the impact of online age verification on privacy. Age verification systems require users to provide personal information, such as their name, date of birth, and government-issued ID. There is a risk that this information could be stolen or misused, compromising the privacy of users.
Conclusion
Online age verification is an essential tool in protecting minors from the dangers of the internet. By restricting access to age-inappropriate content and activities, online age verification helps to promote the safety and well-being of minors. However, there are challenges and concerns that must be addressed to ensure that online age verification is effective and does not compromise the privacy of users.
See: Building Comprehensive Digital Identities in the Metaverse
Ultimately, online age verification is a powerful tool in protecting minors from the dangers of the internet. However, it is just one piece of the puzzle. It's essential to continue to promote online safety for minors through a comprehensive approach that includes education, policy, and technology. By working together, we can help ensure that the internet remains a safe and positive space for all users, regardless of age.
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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Blockchain and NFT Projects are Rebranding (Some of them)
Decrypt | Stephen Graves | Feb 25, 2023
Image: Freepik
As the bear market bites, crypto projects are abandoning terms like NFTs and Web3. Here's how branding experts think they should weather the storm.
- Rebranding examples and perspectives: Are you looking for NFTs on Reddit or Instagram? You’ll have much better luck searching for “digital collectibles” instead. Remember when blockchain was briefly sexy?
- The Bitcoin mining firm formerly known as Riot Blockchain recently rebranded itself as Riot Platforms.
- The World Economic Forum’s head of blockchain and digital assets, Brynly Llyr, has even suggested that the crypto space rebrand itself entirely around “decentralized systems.”
- Are you looking for NFTs on Reddit or Instagram? You’ll have much better luck searching for “digital collectibles” instead. Remember when blockchain was briefly sexy? The Bitcoin mining firm formerly known as Riot Blockchain recently rebranded itself as Riot Platforms. The World Economic Forum’s head of blockchain and digital assets, Brynly Llyr, has even suggested that the crypto space rebrand itself entirely around “decentralized systems.”
- Crypto—and all its associated jargon—are now toxic words. Where once simply adding the word “blockchain” to your name increased your company’s valuation, now crypto, Web3, NFT and the rest of the buzzwords that conjured up images of a brave new world are, to paraphrase Charlie Munger, rat poison.
- For Dickon Laws, global head of innovation services at advertising agency Ogilvy, terms like “crypto” and “Web3” have become toxic not just because of the bad actors in the space, but because of “terrible product-market fit.”
See: Tencent’s Finally Marching into Web3
- Compounding the problem was the fact that brands and businesses “didn’t follow their usual due diligence when investing,” Laws said, meaning that they hadn’t made long-term plans to support their investment in blockchain technology. “So while lots of headlines were generated for ‘world first,’ they don’t have answers for their stakeholders on what their money was spent on and its impact, meaning that growth and ongoing investment–good money after bad–is a really tricky sell.”
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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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