Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Enterprise, Scaleup
Do Kwon Pleas Guilty as Bitcoin Nears Record High
Terra | Aug 13, 2025
Image: Freepik/Wirestock
Terraform Labs Founder Admits to Fraud While Bitcoin at Historic High, Offering Lessons for Innovators
On August 12, 2025, Terraform Labs founder Do Kwon pleaded guilty in a U.S. federal court to fraud charges connected to the $40 billion collapse of TerraUSD in 2022. The plea includes forfeiting more than $19 million and a recommended sentence of up to 12 years in prison, with official sentencing set for December 11, 2025. The development comes as Bitcoin trades near its all time high, shining a light on the incredible appeal and robustness of crypto even with major scandals lurking in the shadows.
Why TerraUSD Crumbled and Bitcoin Held Strong
The timing is ironic, if not remarkable. While one of the most infamous fraud cases in crypto history reaches its turning point, Bitcoin is showing resilience at a price near its all time high. This resilience is grounded in its transparent design and predictable monetary policy. For fintech innovators, it is a reminder that systems with verifiable trust can withstand industry turbulence and public scrutiny.
While Bitcoin is volatile it makes no promise of price stability and operates on open, verifiable code.
TerraUSD was an algorithmic stablecoin designed to maintain a $1 peg without real world asset backing. Prosecutors said Kwon misled investors by failing to disclose the intervention of an outside trading firm to restore the peg during the May 2021 depegging. The collapse revealed a complex and fragile financial system without external audits, reserve transparency, or proven crisis controls.
Integrity and Investor Protection
The Terra collapse destroyed billions in investor wealth and caused severe personal and economic consequences. The $4.5 billion civil penalty Terraform Labs agreed to in 2024 with the U.S. Securities and Exchange Commission confirms that regulators are increasingly prepared to hold firms accountable. Also Kwon still faces criminal charges in South Korea related to the collapse of TerraUSD. If he is removed from the U.S. after serving his sentence, Seoul may pursue extradition to face those charges
See: Brutal Kidnappings Target French Crypto Figures
For fintech builders, protecting investors should not be about checking off a regulatory box but rather a prerequisite for sustainable growth. Product design, public communications, and crisis response must all play a role in a culture of integrity.
Takeaway
The projects that survive and evolve into massive legacies are those that match technical innovation with foundational governance and operational integrity.
Innovation will continue to drive financial change, but trust is the asset that endures.
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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Ottawa Issues New Guidance for Biometric Privacy in Canada
Biometric Guidance | Aug 13, 2025
Image: Freepik/rawpixel.com
Canada Updates Privacy Rules for Federal Institutions and Businesses Using Biometrics
On August 11, 2025, the Privacy Commissioner of Canada (OPC) released final guidance on handling biometric information such as facial recognition, fingerprint scanning, and voice identification.
how federal institutions and businesses must handle biometric information such as facial recognition, fingerprint scanning, and voice identification. The new privacy guidance applies to federal institutions and businesses across all sectors and follows more than a year of public consultation that included input from 34 written submissions and 31 stakeholder meetings. The updated guidance is Canada's response to mounting privacy risks thanks to the rapid growth of using biometric technology in authentication, security, and service delivery.
Why Biometric Data Needs Extra Protection
Biometric data is uniquely tied to an individual’s body and remains consistent over time, making it valuable for verification and sensitive for privacy, but it can reveal health indicators, racial and gender characteristics, and other personal details. Unlike passwords, it cannot be replaced if compromised.
The permanent nature and sensitivity of biometric data increases the risk for organizations collecting, storing, and processing without special safeguards. As the OPC guidance states, "Biometric information is sensitive personal information, and in most cases, it should be treated and protected as such."
See: US Financial Surveillance Report Shows Privacy in Crisis
Philippe Dufresne, Privacy Commissioner stressed:
“Organizations need to approach the use of biometric information in a privacy-protective way, building privacy considerations at the beginning of any new program or initiative.”
Compliance for Businesses Under PIPEDA
The guidance for private sector organizations clarifies when and how biometrics can be collected, used, and disclosed under the Personal Information Protection and Electronic Documents Act (PIPEDA). Businesses must ensure there is a clearly defined and appropriate purpose for any biometric program, supported by a proportionality test to weigh benefits against privacy risks.
They must also obtain meaningful consent from individuals, be transparent about how data will be used, ensure systems are accurate through testing, and apply robust security measures to prevent unauthorized access.
Federal Institution Obligations Under the Privacy Act
Federal institutions adhere to similar principles under the Privacy Act but face additional obligations. They must identify lawful authority before collecting biometric data and conduct a formal Privacy Impact Assessment to evaluate risks and mitigation strategies.
See: Can Cloned Voices Crack Bank Security? Need to Know
The federal guidance simplifies the rules for doing impact and risk assessments so they are easier to follow when planning a program. It also asks federal institutions to think carefully about whether biometrics are truly needed, if the benefits outweigh the privacy risks, and whether other options could work before moving ahead.
Key Changes After the Public Consultation
The final guidance incorporates several adjustments based on stakeholder feedback, including clearer definitions of sensitive information, closer alignment with legal requirements, more detailed technical explanations and best practices, refined consent guidance for private sector use, and expanded discussion of lawful authority for public sector programs.
| Area | Private Sector (PIPEDA) | Federal Institutions (Privacy Act) |
| Legal authority | No specific law needed, but must have a clear, appropriate purpose | Must confirm lawful authority before collecting biometrics |
| Risk assessment | Should assess proportionality and risks, but not formally required | Must complete a formal Privacy Impact Assessment |
| Consent | Must get meaningful, informed consent | Consent may not apply if collection is legally authorized |
| Proportionality | Required to weigh benefits vs privacy risks | Required with added focus on necessity and exploring alternatives |
| Security safeguards | Must apply strong protections to prevent misuse | Same requirement, plus oversight within government frameworks |
Impact on Financial Technology and Digital Services
For fintechs, payment providers, and digital identity innovators, the guidance sets a higher compliance bar for wherever biometric services may be used, such as customer on-boarding, fraud prevention, and authentication. Companies will need to integrate privacy risk analysis into early product design, justify and write-down decision-making, and ensure biometric tools are tested for accuracy and fairness.
See: Meta Agrees to Pay $14B to Texas for Data Privacy Settlement
Meeting these requirements will add compliance costs but will be important to maintain consumer trust and avoiding regulatory scrutiny as biometric use expands in financial services.
Outlook for Biometric Governance in Canada
With it's latest guidance, the Privacy Commissioner is making biometric governance a core compliance area in Canada. For fintechs, this is both a regulatory obligation and a competitive opportunity. Those that build privacy into biometric solutions from the beginning can improve market credibility while remaining compliant.
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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International Freight Shipping from Canada — What It Means for Your Cargo
Aug 11, 2025
Image courtesy of AI
Let’s imagine a furniture business in Montreal that receives a huge order from Europe. They want to send a container overseas with tables and chairs. Fine examples of commercial cargo — huge shipments that need special care with packing, documenting, and transporting.
Maybe you also run a business or just have a large shipment to send. Knowing how international freight shipping works can help you avoid stress and make the whole process much easier.
What Is Commercial Cargo? Examples Inside
Commercial cargo from Canada usually means shipments that are larger, heavier, or bulkier than regular parcels. Here are some typical examples:
- Toronto-based tech startup that sends pallets of electronics to clients in Asia.
- A Vancouver clothing brand that ships boxes of inventory to European retailers.
- Calgary-based artist collective exporting sculptures overseas for exhibitions.
- Families moving from Ottawa, sending furniture and household goods.
If your shipment is over 150 kg or requires special container space, it’s likely commercial cargo. This can be shipped as LCL (Less than Container Load), when you share container space, or FCL (Full Container Load) for big, dedicated shipments.
How to Send Commercial Cargo from Canada
Sending commercial cargo requires a trusted company that understands cross border regulations and the complexity of international delivery. Here’s a quick overview of how to get started with Mees Portal:
- To get started, create your account at www.ca.meest.com/portal. It only takes a few minutes, but after that, you'll be able to enjoy all the benefits of the service.
- Get an international freight quote. Use online calculators to compare rates for your shipment size and destination.
- Prepare your shipment. Ensure items are packed securely and documented properly for customs.
- Choose your shipping method. Decide between air (faster, pricier) or sea (more economical for large containers).
- Book your shipment. Schedule a pickup or drop off your cargo at designated locations in cities like Winnipeg, Edmonton, or Calgary.
- Track your cargo. Use online tracking tools to monitor your shipment from Canada to its overseas destination.
Shipping Containers: What’s the Difference
And now about containers. The visible difference in price makes you think. But actually, it’s about your options. That is, you don’t have to pay for the whole container if you don’t have that much to ship. So, when you send container overseas, you have FCL and LCL options.
Full load means just that. You rent an entire container, usually 20 or 40 feet. Ideal for big shipments that fill or nearly fill a container.
LesslLoad is more about sharing. That is, your cargo shares a container space with other shipments. It’s cheaper and opens up more possibilities.
Loading containers properly is vital to avoid damage and extra fees. Shipping services provide guidance on packing and weight distribution to maximize space and comply with international shipping standards.
Why Choose Meest for Your Overseas Freight Shipping?
Meest Canada has been helping people send international shipments for over 35 years. If you need to send cargo from Canada overseas, a few pallets or a full container, Meest makes it simple. You can ship by sea or air, get a quick quote, and track everything online. Prices are clear, service is fast, and shipments are delivered safely worldwide.
See: Resources for Canadian Resiliency and Competitiveness
Remember that furniture business in Montreal? They used Meest to send a container of chairs to Europe. Booked it online, packed the goods, got help with the paperwork, and the shipment arrived right on time. Want yours to go just as smoothly?
Get your international freight shipping quote today and send your commercial cargo with confidence.
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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Ripple Acquires Rail for $200M to Boost Stablecoin Payments
M&A | Aug 8, 2025
Ripple's $200M Acquisition of Rail Strengthens Stablecoin Payment Capabilities
On August 7, 2025, enterprise blockchain digital payment leader Ripple announced that it's entered an agreement to acquire Rail, a Toronto-based stablecoin global payments platform for $200 million. The acquisition will boost Ripple’s stablecoin infrastructure and solidifies its position as a leader in the digital asset payments industry.
Rail’s Canadian Roots
Founded in 2021 by Bhanu Kohli and Tarun Mistry as Layer2 Financial, Rail is a Canadian-registered company based in Toronto, Ontario. The company's mission from the start was to build a platform that would enable instant, transparent, and reliable international payments for businesses using stablecoin technology alongside fiat support. Rail’s focus on combining digital asset infrastructure with compliance made it an ideal fit for a growing cross-border payments market.
In 2024, Rail rebranded to its current name and raised $10.7 million in Series A funding.
To date in 2025, Rail processed over 10% of the global $36 billion in B2B stablecoin payments, flexing it's growth and benchmarked market share.
Rail is officially registered in both Canada and the United States. Its registration as a money services business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the U.S. Financial Crimes Enforcement Network (FinCEN) further underscores its commitment to meeting regulatory standards and building a trusted platform for cross-border payments.
Why Ripple and Rail Are a Great Fit
Rail's infrastructure improves Ripple’s stablecoin payment capabilities, especially in the growing B2B payments sector. Ripple has spent over a decade building digital asset infrastructure that integrates seamlessly with traditional finance. Ripple’s platform offers businesses secure, compliant tools for storing, trading, and transferring value, making it an ideal complement to Rail’s innovative stablecoin solutions.
See: Citi and BofA Plan Stablecoins as Regulation Advances
Monica Long, Ripple President:
“Stablecoins are quickly becoming a cornerstone of modern finance, and with Rail, we are uniquely positioned to drive the next phase of innovation and adoption of stablecoins and blockchain in global payments. Ripple has one of the most widely used digital asset payment networks in the world, and this acquisition underscores our commitment to helping our global customer base to move money wherever and whenever they need.”
Ripple's Expanding Offering and The Future of Payments
Ripple’s expanded offering will allow businesses to process stablecoin pay-ins and pay-outs across key financial pathways, such as USD, without needing to hold crypto on their balance sheets. This simplifies the payment process for companies and it's cost effective for international transactions.
Beyond stablecoin transfers, the Ripple-Rail offering will enable businesses to manage third-party payments and internal treasury flows seamlessly through a unified platform. Rail’s automated back-office infrastructure provides an always accessible 24/7 global payment network via a single API. So customers have access to a reliable payment solution at all times.
See: Ripple Seeks US Bank Charter for Stablecoin Expansion
Ripple also recently acquired a multi-asset prime broker Hidden Road for $1.25 billion on April 8, 2025.
In addition to the acquisitions, Ripple's growth is benefiting from positive regulatory sentiment in the U.S. The SEC dropped its case against Ripple regarding its XRP token, and the approval of the U.S. Senate's Genius Act earlier this year, establishing a framework for stablecoin regulation.
Bhanu Kohli, CEO Rail:
“Over the last four years, Rail built the fastest way to settle business payments internationally using stablecoins, and in 2025, Rail is forecasted to process over 10% of the $36B global B2B stablecoin payments. Ripple shares our vision, and together, we’re excited to bring our innovation to the millions of businesses that move money internationally.”
Why This Matters
By combining Ripple’s established network with Rail’s innovative stablecoin infrastructure solutions, the two companies will provide more comprehensive solutions for businesses that need to move money across borders. As stablecoin adoption continues to rise, businesses will increasingly look for solutions that simplify cross-border payments while ensuring compliance with global regulations.
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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How GPT-5’s Launch Will Transform the Fintech
Artificial Intelligence | Aug 8, 2025
Image: Freepik/kjpargeter
What You Need to Know about OpenAI's Newly Released GPT-5
On August 7, 2025, OpenAI officially announced the release of GPT-5, it's latest artificial intelligence (AI) model with advanced capabilities that could significantly transform sectors in the near future, including fintech. From improving app development processes to enhancing customer engagement, GPT-5 offers companies with powerful tools to innovate and stay competitive. This article looks at key features, performance, and how it could be applied to real-world fintech applications.
What's New in GPT-5?
GPT-5 introduces several exciting features, each with direct relevance to fintech. Here's an overview of some key upgrades and how they can impact fintech businesses:
1. Advanced Reasoning will Improve Complex Financial Decisions
GPT-5 can now handle more multi-step, data-driven tasks; it's more agentic. In fintech, where decision outcomes usually rely on complex financial models and large datasets, GPT-5 can generate more accurate insights and prediction results. A credit risk model that combines structured data (e.g., income, credit history) with unstructured data (e.g., social media sentiment, customer reviews).
See: AI Fintechs Attract a 242% Valuation Premium
GPT-5’s improved reasoning can analyze these diverse data sources in real-time, helping fintechs and financial institutions make better lending decisions that ultimately reduce default risks. For example, a fintech company offering microloans could integrate GPT-5 into their platform to analyze the creditworthiness of borrowers by evaluating non-traditional data sources, such as purchasing behavior or community feedback, alongside traditional financial data.
2. Building Fintech Apps with Natural Language (Vibe Coding)
One of GPT-5’s most anticipated features is vibe coding, which is in hot demand. Just look at vibe coding pioneer Lovable, the fastest growing software company in history. Instead of writing lines of code, developers or pretty much anyone who can engineer a robust prompt, can now simply describe the functionality they want, and GPT-5 will generate the actual code. This has massive implications for fintech businesses looking to quickly prototype new applications or tools without extensive coding expertise. For example, a fintech startup looking to launch a budgeting app can describe the app’s desired features, such as “track user spending across categories like food, rent, and entertainment”, provide the data sources and GPT-5 will create an actual working app prototype, saving time, reducing costs, and enabling product innovators to quickly test ideas in the market.
3. More Advanced Multimodal Capabilities
GPT-5 can handle more complex multimodal tasks, allowing it to interact with a wider range of data types and inputs in real-time (i.e., text, images, audio, video), offering users a more dynamic and improved customer experience, such as an AI concierge service assistant that can respond to user questions and use cases using not just text but also analyze and generate images like financial charts or explainer videos, improving communication and user satisfaction.
See: Why No Code AI Agents Matter for Fintech in Canada
For example, fintech platform offering investment advice could use GPT-5 to generate personalized financial reports for clients. Instead of just providing text-based summaries, the model could generate visual reports with graphs and interactive charts, making the information more understandable for users.
4. Better Personalized User Experience
GPT-5 takes personalization to the next level by adjusting its responses in real-time based on a user’s preferences and needs during the conversation. It doesn’t store information beyond the current session but uses contextual understanding to make financial advice more relevant. For example, if a user mentions an interest in low-risk investments, GPT-5 will personalize its responses accordingly, even if the user doesn't repeat it later in the conversation. It also adapts the complexity of its advice based on the user's level of knowledge, whether they need basic tips or more detailed strategies. This ability to dynamically adjust in real-time helps fintech companies deliver highly personalized experiences without relying on long-term memory.
5. Real-Time Monitoring for Enhanced Fraud Detection and Compliance
Fraud prevention and regulatory compliance are critical in fintech for trustworthy regulated transactions. GPT-5 comes with stronger pattern recognition capabilities that can help automate these processes. By analyzing huge amounts of transactional data in real-time, GPT-5 can spot suspicious activities and flag potential fraud better than before.
See: Ramp Raises $500M Shares AI Finance Roadmap
GPT-5 can also be integrated into regulatory compliance tools to ensure that fintechs and their users meet legal requirements by identifying gaps and discrepancies of non-compliant behaviours. By analyzing not just transaction patterns but also customer interactions (e.g., communications with support), GPT-5 could improve fraud detection accuracy and reduce false positives.
GPT-5 vs GPT-4o Performance Comparison
Reports say GPT-5 reduces factual error rate by 45% compared to GPT-4o, so responses are more reliable and accurate. This is of course highly useful for fintech use cases that need high accuracy to support decision making such as a loan approval.
Checkout Datacamp's GPT-5 benchmarking review for details. In short, GPT-5 is better than GPT-4o at coding, math, multimodal tasks, and handling large contexts, making it a more powerful AI to handle complex tasks required in financial services.
- GPT-5 beat GPT-4o by a wide margin in coding tasks. It scored 74.9% on a real world Python coding test compared to 69.1% for GPT-4o.
- GPT-5 scored 94.6% on a competitive math test vs GPT-4o’s 88.9%. It also does better in science-related tasks and problem solving.
- GPT-5 outperformed GPT-4o in multimodal reasoning scoring 84.2% on visual tasks (compared to GPT-4o’s 78.4%).
- GPT-5 can process large amounts of data (up to 400K tokens), making it better at managing complex, multi-step tasks over long conversations.
Reactions to GPT-5's Rollout
OpenAI's launch of GPT-5 has not been without its challenges. CEO Sam Altman admitted that the rollout faced several issues, particularly with an automatic model selecting feature, which initially wasn't working as expected. In a Reddit AMA, Altman admitted that the model’s rollout was "bumpy" but reassured users that the team made some improvements to GPT-5, which "will seem smarter starting today". Also after many users expressed a preference for the older model's personality and performance, OpenAI decided to reinstate GPT-4o for ChatGPT Plus subscribers. It appears that Altman underestimated how much users valued GPT-4o's specific traits.
Creating a Mini Game with NCFA Logo Using Vibe Coding (Bonus!)
To explore the power of GPT-5's vibe coding, we tested its capabilities by asking it to create a mini interactive game that incorporates the NCFA logo. The goal was to see how easy it was to use GPT-5 to generate a simple, interactive point driven game from a single plain language prompt.
Here’s the prompt we used:
"Create a simple interactive game where users can click to collect NCFA logos that appear randomly on the screen. The game should have a basic scoring system, a start and stop button, and a simple animation for the logos as they appear and disappear. The game should be created using HTML, CSS, and JavaScript. The NCFA logo should appear as an image file that I can upload."
Read: Walmart AI Super Agents Set New Retail Standard
It took GPT-5 about 10 seconds to generate the full code, which included:
- A score counter that increased each time the user clicked on a logo
- Randomized logo placement across the screen
- A start/stop button to control gameplay
- Smooth animations for the logo appearing and disappearing
Image: NCFA logo game code vibing test
The game worked perfectly with the National Crowdfunding & Fintech Association of Canada's logo intermittently bouncing all over the screen, with points accumulating with each accurate click on the logo. Imagine creating promotional games or interactive educational tools quickly without needing extensive coding experience. Yes, the warning to software engineers is true.
Read: DOGE Aims to Use AI to Cut 50% of Regulations
Funny that Microsoft recently published a report predicting the top 40 job types at risk of being taken over by AI agents, but somehow their list doesn't seem to include software programmers? At the same time, Microsoft's CTO said that in the next 5 years, AI will handle 95% of all coding.
Outlook
GPT-5 is another step towards the future of artificial intelligence, now offering fintech businesses more advanced tools to innovate quickly. Whether it’s improving decision making with advanced reasoning or customer engagement with personalized experiences, or simplifying app development with vibe coding, GPT-5 is a powerful asset for any fintech company at this point of the AI revolution, making it an critical intelligence engine for to help fintechs improve operations and deliver smarter, more personalized experiences for their customers. Now just wait for all the competition looking to level up next.
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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Stronger Teeth Needed to Protect Canada’s IP
IP Policy and Competition | August 7, 2025
Image: FreepikWeak IP Policy and Procurement Choices Are Eroding Canada's Sovereignty
On August 6, 2025, there's an inspiring OpEd in the Financial Post by Jim Hinton and Alexis Conrad, who argued that Canada’s sovereignty is being eroded not by military threats but by the loss of control over its intellectual property. They warn in today's economy it's no longer about "flags, borders, boots on the ground" that define national strength but rather it's the intangibles, such as the source code, algorithms patents, and digital infrastructure that strengthen global leverage and competitiveness, and Canada's current approach to IP is giving it away faster than innovators can build them.
See: Canada’s Productivity Depends on Intangible Tech Adoption
Prime Minister Mark Carney has committed to raising defence spending to $150 billion annually by 2035. But Canada still lacks a framework to retain the intellectual property created through public investment. More than 50 % of university-developed IP ends up in foreign hands, often with no commercial benefit to Canadian firms. Patent office filings show transfers of Canadian-invented technology from Dalhousie to Tesla and from the University of Toronto to Google. Researchers from 50 Canadian universities co-authored work with Chinese military related scientists between 2005 and 2022. Foreign ownership of Canadian inventions and patents has tripled since 2001, now accounting for 56 % of the total.
Procurement Policy is Reinforcing the Problem
Canada’s first major contract under the new defence strategy for an arctic radar system valued at $6.5 billion was awarded to an Australian firm. Although there may not be an exact equivalent defence supplier in Canada, there was no public evidence showed that Canadian options were seriously considered. In cleantech, a Burnaby-based carbon capture pioneer Svante is considering a move to the U.S. after being excluded from Canada’s clean tech tax credits. These examples show that public funding and procurement are not aligned with long-term national control.
ElevateIP is a federal initiative created to help startups protect and manage intellectual property, but it lacks key structural elements. It does not require Canadian IP ownership or tie support to procurement or national priorities. It does not coordinate with university tech transfer or public research institutions. It does not track the outcomes of supported IP. As a result, it helps educate founders on IP strategy but offers no protection against IP loss or foreign transfer.
Fintech IP is Equally at Risk
The challenges raised by this article are highly relevant to fintech. Canadian fintech companies often rely on proprietary algorithms, transaction infrastructure, digital identity systems, and embedded financial technologies that qualify as intellectual property. But there is no policy ensuring that publicly supported fintech innovation remains in Canadian control. Many early-stage fintechs are spun out of university labs or supported by public accelerators. Without clear ownership conditions or commercialization requirements, they face the same risks as cleantech and AI firms via acquisition or licensing by larger foreign organizations that ultimately repatriate value outside of Canada.
See: Landmark Legal NFT Decision Favours Intellectual Property Owners
Fintech IP is also foundational to digital sovereignty. Payments, lending, credit scoring, open banking infrastructure, compliance automation, and digital asset platforms depend on core IP and data control. If these are owned abroad, Canada risks falling behind on financial inclusion, global competitiveness, and platform security.
Public funding that supports fintech innovation without securing ownership or commercialization rights fails to build long term value at home.
Why This Matters Now
Countries like the U.S., South Korea, and Finland have updated their strategies to secure domestic IP and use procurement as a growth lever. Canada still relies on outdated models. Innovation without ownership means financing someone else’s economy. Canada must close the policy gaps between research, funding, procurement, and commercialization if it wants to retain control of its own innovation pipeline and competitiveness.
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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AI Fintechs Attract a 242% Valuation Premium
AI Fintech Report | Aug 5, 2025
Image: Freepik
AI startups are Dominating Fintech Deal Flow in 2025 - Higher Valuations, Bigger Checks, and Faster Rounds
The latest Q3 2025 PitchBook report confirms an investment gap is being driven by a clear premium on automation and AI-enhanced infrastructure. PitchBook data shows that early stage AI-enabled fintechs are raising at a median pre-money valuation of $134 million. That is 242% higher than the $39.2 million median for non-AI peers. Startups with built-in AI capabilities have raised $3.5 billion across 171 venture deals so far this year, capturing 54.4% of total deal value. By comparison, non-AI fintech firms closed 195 deals but raised only $3 billion.
AI Premiums Are Largest at the Early Stage
The largest gap is at the early stage. AI-enabled fintech startups are raising at a median pre-money valuation of $134 million, compared to $39.2 million for non-AI peers. That is a 242% premium, the highest of all stages in 2025. Only the pre-seed and seed levels showed a small dip but Pitchbook attributes to limited disclosures and early year sample effects.
At the venture growth stage, AI fintechs are closing deals with a median round size of $50 million, compared to $30 million for non-AI fintechs, a 66.7% premium.
See: Vertical AI’s Inevitable Rise. Who’s At Risk?
Later stage AI fintechs are also attracting higher valuations. Their median pre-money valuation is $72.5 million, 6.7% higher than the $68 million median for non-AI companies.
Enterprise Fintech Leads in AI Adoption
Of all U.S. AI-enabled fintech companies, 80.3% are B2B. The most active segments are CFO stack (19.5%), wealthtech (18.4%), and financial services infrastructure (15%). These areas are drawing the largest funding rounds and investor attention.
In 2025, financial infrastructure AI firms raised $887.9 million, while non-AI peers in the same segment raised just $216 million. Ramp, Plaid, and Addepar each secured funding rounds of $200 million or more.
See: Global Rules Now Count Intangibles. So Can Canada
AI of course dominates the regtech sector with At the venture growth stage, AI fintechs are closing deals with a median round size of $50 million, compared to $30 million for non-AI fintechs, a 66.7% premium..
AI Startups Are Raising Bigger Rounds, Sooner
In 2025 to date AI fintechs are raising more money per round than their non-AI peers. The typical deal size for an AI fintech is $8.4 million, which is 7.7% higher than the $7.8 million median for non-AI companies. At the seed stage the gap is even wider. AI startups are raising $4.1 million per round, compared to $3.2 million for non-AI startups, a 28.5% premium.
These companies are not just raising more. They are also raising faster. The average time between funding rounds is 1.85 years for AI fintechs, slightly shorter than the 1.90 years it takes non-AI fintechs. The difference may seem small but it suggests that investors are more willing to write follow-up checks quickly when they see momentum and early results.
AI Exits Are Still Small but Acquisitions Are Picking Up
So far in 2025 exits for AI fintech companies remain limited. These companies have generated $10.6 billion in total exit value across 17 deals, but most of that came from one transaction. Chime’s IPO alone accounted for $9.1 billion. Without it, the remaining exits add up to just $1.5 billion, which is lower than the $2.3 billion recorded across 31 exit deals by non-AI fintech companies.
See: DPI Digital Finance Works. Why Is Canada Still Waiting?
On the other hand, mergers and acquisitions (M&A) are gaining momentum. AI fintechs have completed $20.7 billion in M&A activity across 24 deals so far this year. That puts 2025 on pace to match 2024, which ended with $53.2 billion in total M&A deal value for AI companies. Buyers are looking to speed up their internal AI capabilities, improve their product offerings, compete with new startups, and build stronger decision-making systems powered by data.
Outlook
AI is no longer optional for fintech companies that want to lead. Investors are rewarding AI first companies with faster funding, larger checks, and significantly higher valuations. These companies aren't just building automation tools but are quickly becoming the new infrastructure layer across enterprise finance, compliance, and infrastructure. It's pretty clear that founders who want to be globally competitive must build AI into the core of it's model, not the margins.
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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