Category Archives: Fintech Interviews and Podcasts

Q&A with Fintech Investor David Nault, Co-Founder & General Partner, Luge Capital

Luge Capital | David Nault | Nov 17, 2021

NCFA – David Nault Luge Capital

Has your investment thesis changed pre-covid versus now?

Covid has been a digital reality check for financial institutions. The strongest companies that have emerged post Covid are those helping financial institutions accelerate their digital transformation without being a victim of long sales cycles. Our thesis has changed little in that we believe in collaborating with financial institutions and removing friction for users to consume financial services.

What do you see as the long-term impact of COVID-19 on the pace, shape and evolution of the Canadian fintech ecosystem?

Many of the services provided by financial institutions were done face to face or with a wet signature. Due to Covid this is changing and will last longer term.

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The other big change is that a larger portion of talent working in financial institutions will be able to work remotely which will provide a larger more skilled talent pool and savings.

What fintech verticals are you most excited about over the next 5 years and why?

  • We're seeing big growth in digital insurance (B2B and B2C) especially in life and health and employee benefits.
  • The gig economy is driving digital SMB banking and this is a huge market.
  • Security will continue to grow due to new digital financial services that increase possible risk.
  • Online financial services means the need for more data analytics and process automation.
  • As crypto continues its momentum, we beleive there are significant opportunities to further develop user-friendly DeFi applications to address a broader user base.

What advice would you give fintechs who are looking for new ways to tap the global market during this crisis?

See:  How to grow young fintech talent

I have some general comments then one specific comment during covid.

  1. Succeed in one big market before going to another. Going into other markets requires resources and teams that understand the nuances of those other markets including, user preferences, regulation, and compliance.
  2. Make sure to architect the solution so that it is multilingual and multicurrency.
  3. Ask yourself can my business scale in other geographies if travel restrictions continue?

Is there anything else you’d like to add?

One last thing. Covid may accelerate certain businesses however it is important to understand demand post covid to map out the longer-term strategy.


NCFA Fintech Confidential Issue 4 250 - Technology Due Diligence Process and Cyber Risks for Fintech Start-ups

This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:

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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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Views from the Market: Midmarket M&A and Private Equity Podcast

Stikeman Elliot | Mario Nigro | Oct 27, 2021

private equityPlease join us – at your convenience – for a new series of podcasts on private equity and midmarket M&A, with a focus on Canada. In these concise 15-minute segments, a wide range of industry participants discuss the deal market trends that they’ve been seeing. The host and originator of the series is Mario Nigro, M&A partner at Stikeman Elliott in Toronto.

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Episode 21: What is Driving Today’s High Valuations and Can It Continue?

Dr. Howard Johnson, Canadian Market Leader at Duff & Phelps
Mario’s guest is Howard Johnson, Canadian Market Leader at Duff & Phelps and managing director in its M&A Advisory practice. A veteran of the Canadian midmarket and a valuation expert, Howard believes that today’s high valuations and (often) double-digit multiples are likely to persist since many public companies and PE firms are cash-rich and eager to invest. Tax reform and the uncertainty of pandemic-era earnings analysis may emerge as complicating factors, however. Spotify | Apple Podcasts (iTunes) | SoundCloud
Episode 20: What Does A Tech-focused U.S. Private Equity Firm See In Canada?

Doyl Burkett, Managing Partner, Integrity Growth Partners
Doyl Burkett, Managing Partner of Los Angeles-based Integrity Growth Partners, joins Mario Nigro to discuss PE investments in the software and tech-enabled business services space. Integrity typically invests $10-40m in founder-owned-and-operated businesses, often taking non-controlling positions. Doyl’s strategic focus on “underserved geographies” has generated many opportunities across Canada. Spotify | Apple Podcasts (iTunes) | SoundCloud
Episode 19: Scaling Canada’s Smaller Successful Companies: A New Solution to an Old Challenge

George Rossolatos, CEO of Canadian Business Growth Fund
Joining Mario Nigro is George Rossolatos, CEO of Toronto-based Canadian Business Growth Fund (CBGF), a private equity investor that takes minority stakes in Canadian companies, typically those in the $10-25m revenue range, working with them to promote long-term growth. CBGF was created in 2018, with George as Founding CEO, in response to concerns that Canada needs to get better at growing its successful startups into strong midmarket players. Spotify | Apple Podcasts (iTunes) | SoundCloud

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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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Tamara Kiteley: Liquid Avatar’s 17-Year-Old Comic Book Art Sensation

New York Weekly Times | Nov 15, 2021

Tamara KiteleyInterview with Comic book art prodigy Tamar Kiteley

Tamara Kiteley is quickly making her mark in the industry working with Liquid Avatar Technologies and debuting her work at Los Angeles Comic Con at the Los Angeles Convention Center December 3–5. Already working on comic book covers, the 17-year-old Canadian artist hopes to eventually have a career in animation.

Tamara has already dazzled Liquid Avatar with her creations, and she is working on their collaborative project, “The Outer Space Men,” where she is designing a collection of digital icons for their biometrically verified Self Sovereign Identity platform. She will be debuting her cover for “Colossus Rex” at The Outer Space Men Kickstarter on November 15.

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Tamara does what makes her soul shine. Her artwork is filled with inspiring symphonic textures and colors. Mesmerized by her own passion she is like an alchemist transforming art into a narrative of truth.

You are an amazing artist. How old were you when you realized that you could draw?

When I was old enough to hold a pencil. I’ve been drawing since I could. I think I was in grade school when I really realized that I could draw, so I was probably around 9 years old. I really started getting into art and creating, sketching, painting, using markers, etc. From there I just developed this passion for art, and I have loved it ever since.

How did you get into comic book art?

My dad was a huge fan of comic books. He had a lot of old comic books in the basement. He showed them to me when I was little and of course I love Marvel Comics, I love the Marvel Universe, and so I’ve always been fascinated by the style and the detail and color. So, I tried to replicate that through my sketches. That got me noticed. People started to look at and enjoy my art and they wanted me to create for them. That’s how I got where I am today.

How are you associated with Liquid Avatar, and what exactly do you do with them?

One of my mother’s very close friends, Lynn, saw my art and the things that I created, and she thought I might have the potential to create some projects for Liquid Avatar. She connected me to a lovely man, Mariano Nicieza, who worked for Marvel Comics and now runs Apex Comics Group.

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From there I ended up connecting with Liquid Avatar and re-creating The Outer Space Men figures originally created by Mel Birnkrant in the 1960s. That was my first project for Liquid Avatar. From there they gave me a comic book cover to work on as well.

Where do you hope to be in five years with your already fabulous art career?

Currently, I’m looking at colleges and universities. I have four big ones in mind. My number one would be the animation program at Sheridan in Ontario, Canada. I’m hoping to create cartoon animation, sticking with the cartoon comic book style. My dream is to work for the Cartoon Network. I want to produce cartoons for them, kids’ cartoons, adult cartoons, etc. I just want to get into animation. That’s my number one dream and goal.

Do you have Comic Cons in Ontario?

Yes, we do, however, I’ve never been to a convention before. The first convention that I’m going to, L.A. Comic Con, my art is going to be featured. That’s pretty crazy for me.

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Congratulations on that! Do people know your art?

I’ve only done work for Liquid Avatar and Apex Comics Group but soon my work is going to be featured at the Indiegogo Crowdfunder for Phazer Universe. That’s going to be for my cover which is a Blackray variant and on November 15 at the Outer Space Men Kickstarter with Liquid Avatar, which is for my Colossus Rex cover. I’m hoping that that will get me some exposure along with L.A. Comic Con. That should get some different people noticing me.

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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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Amazon’s Jeff Bezos hired this applicant ‘on the spot’—here are the 2 interview questions asked

CNBC Make It | Ann Hiatt | Nov 2, 2021

Jeff Bezos2People always want to know how I got Jeff Bezos to take a chance and hire me to work directly for him at Amazon in 2002.

I submitted my resume to Amazon without much thought. To my surprise, I was called in for a first-round interview for a junior assistant role. I had no connections at the company, no computer science degree, and absolutely no experience working for a CEO.

My job interview experience at Amazon

My initial interviews at Amazon were dizzying in volume and pace. I had back-to-back interviews with all of the senior assistants, some of them lasting all day.

See:  How to grow young fintech talent

One interview took place in a dark office with just the glow of a code-filled monitor and a weird multicolored rotating nightlight in the corner. But I had known enough tech people in my life and was used to the awkward settings. I just chalked up the encounter to one of those personalities uniquely suited for the tech world and was unfazed by it.

A few months later, after I had not heard back and was beginning to lose all hope, the phone rang: An Amazon recruiter asked me to come back for a final interview. She apologized for the long, drawn-out process and promised me that this would be the last one.

What she didn’t tell me was that it would be with Bezos himself.

The 2 interview questions Jeff Bezos asked me

Bezos started the interview by promising that he was only going to ask two questions and that the first one would be a “fun” brainteaser.

1. “I want you to estimate the number of panes of glass in the city of Seattle.”

I was momentarily terrified.  And then we did the math.  We got down into every possible scenario, group, anomaly and ways to account for these exceptions. It felt like I talked it through for hours while Bezos filled the whiteboard with numbers. I’m sure it actually took more like 10 minutes.

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I remember feeling a thrill when he wrote down the final estimate. He circled it. “That looks about right,” he said.  Phew!

He then asked me the second question:

2. “What are your career goals?”

Grit, ambition and energy is more valuable than a specific skill set

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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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SEC Chair Gary Gensler speaks to Yahoo Finance about Bitcoin ETF, DeFi and Stablecoins

Yahoo Finance | Oct 25, 2021

Gensler interview at All Markets summit

In a wide-ranging interview with Yahoo Finance's Brian Cheung, SEC Chair Gary Gensler discusses cryptocurrency regulation, the GameStop trading frenzy, and various conflicts tied to retail investing and crypto trading

Video Transcript of SEC Chair Gary Gensler with Yahoo Finance interview by Brian Cheung (BC)

Gary Gensler is chair of the Securities and Exchange Commission, the government's top financial markets watchdog. Gensler joined the SEC in April 2021, and is facing many regulatory puzzles from payment for order flow to ESG corporate disclosures to, of course, cryptocurrencies.  The former MIT professor and Baltimore, Maryland native is no stranger to the regulatory world. Having served as the head of the Commodity Futures Trading Commission under the Obama administration. He's also an alumni of Goldman Sachs with a deep knowledge of Wall Street.

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BRIAN CHEUNG:  Just wondering if you had any thoughts about how those two products rolled out, the ones from ProShares in addition to Valkyrie. Is anything that you're seeing, the volume and interest in this brand new product also guiding your thoughts on maybe the possibility of these applications that you're working through on a Bitcoin spot ETF? Do you feel like anything that you've seen, though, with the Bitcoin futures products last week are resolved? Are any of those concerns kind of alleviated given what we've seen, the response to those products be?

GARY GENSLER: Brian, you can imagine I'm not going to speak to any individual filings that might be in front of us or prejudge anything. But I think that the concern for the investing public is the crypto asset space to plus 2 and 1/2 trillion dollars.  Most of it has not come within an investor protection remit. And thus, investors are protected the way they are, whether they go into the stock or bond markets that we've overseen for so long. Without that, I think that it's really is, as I've said to others, a bit of the Wild West. And these markets largely around the globe, 24 hours a day, seven days a week don't have the similar protections against fraud and manipulation and front-running and other abuses.

BC: So let's move on to stablecoins kind of sub corner in the crypto space. They've been eating a lot of lunch from the prime money market funds. And there's been some media reporting that's gotten a lot of attention about the transparency by which some of these stablecoins are detailing what's actually underlying the reserves that back these assets. You've compared stablecoins to chips at a Casino. Do you think that stablecoin should be regulated as banks?

See:  SEC likely to target stablecoins this week, report says

GARY GENSLER: Well, there's about $130 billion stablecoins today. That's up nearly tenfold in the last year. And they are intertwined inside of crypto exchanges, crypto lending platforms, so-called DeFi. And those poker chips, so to speak, are facilitating 80% of the volume. So there are only 5% of the crypto market.

But 80% of the volume in this token to token, crypto to crypto trading. And so I think there's a lot of speculative activity. And again, it's best to bring that inside regulatory investor protection remit. So I do think there's work to be done here.

BC: What you kind of said right there about the amount of volume that we've been seeing in this space does kind of also extend to the broad DeFi movement. Just wondering what your thoughts are on DeFi. Obviously, it stretches into a lot of different areas. What do you feel like the SEC's role is in regulating that space? Just kind of your broad thoughts on that.

GARY GENSLER:  Decentralized finance has started to press up some other innovations. While that's all interesting, it reminds me a lot about when peer-to-peer lending came along about 15 years ago. People said, well, I'll lend money to you and it would just be peer-to-peer. And we had to take 3, 4, 5 years to bring it within an investor protection, and in some cases, banking regulation.

See:  SEC says GameStop’s wild stock surge was not short covering

And I would say that's what we're going through right now. The same process, hopefully, we get to the other side where whatever innovation it's there survives. But again, the public is protected. We protect against financial stability concerns as well. There's a lot of lending going on. There's a lot of trading going on. And without protections, I fear that it's going to end poorly.

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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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Legaltech startup Clio launches Fintech payment product and investment fund

Betakit | Josh Scott | Oct 26, 2021

jack newton of ClioLegaltech startup Clio has announced the launch of Clio Payments and a new fund, as the Burnaby-based unicorn joins a growing group of companies spicing up their SaaS offerings with a pinch of FinTech.

In an interview with BetaKit, Clio co-founder and CEO Jack Newton called Clio Payments “one of the most significant engineering and product investments” the startup has made to date. The CEO also referred to Clio’s move into FinTech as “a natural progression” towards its goal of building an “operating system” for legal clients.

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To further accelerate that goal is Clio Ventures, a new investment fund through which the company plans to back early-stage partner companies working on integrations with Clio. Newton said the aim is in part to help make Clio’s offering a more “tailor-made solution” for various legal practice areas.

On the payments side, Clio previously offered Clio Payments powered by a third-party processor, Austin-based LawPay. But according to Newton, this offering was limited, and Clio saw an opportunity to build its own payments platform “from the ground up” and imbue it with more capabilities and a better customer experience.

Clio unveiled Clio Payments and Clio Ventures as part of its 2021 Clio Cloud Conference, alongside a slew of other product announcements, including the launch of a mobile and desktop communication app for clients and cloud-based document management app.

These moves are the latest in what has been a busy year for Clio, which has acquired Lawyaw and CalendarRules, and raised a $136 million CAD ($110 million USD) Series E round led by T. Rowe Price Investment Management and OMERS Growth Equity, at a reported $1.6 billion USD valuation. According to the startup, this financing established Clio as the first legal practice management company globally to reach unicorn status.

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According to Newton, payments are “at the heart of [Clio’s] operating system,” and “a really natural thing for us to own and to develop ourselves.  It’s often the very end of the legal interaction, the end of the journey that orbits around payments, that is actually filled with a lot of friction for both consumers and for lawyers,” said Newton.

According to the CEO, many lawyers face difficulty billing and getting paid due to the use of outdated paper invoice and payment processes, while clients sometimes struggle to pay in a lump sum and have a hard time understanding fees, especially within the existing legal payment provider landscape.

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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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NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Speech by Jon Cunliffe: ‘Is crypto a financial stability risk’?

Bank of England | Jon Cunliffe, Deputy Governor, Financial Stability | Oct 13, 2021

Sir Jon Cunliffe

Sir Jon Cunliffe, Deputy Governor, Financial Stability, BoE

Jon Cunliffe's Speech Overview delivered at Sibos:  Jon Cunliffe looks at the impact of ‘crypto’ on the stability of the UK’s financial system.  He says unbacked crypto-assets (eg Bitcoin) and backed crypto-assets for payments (stablecoins) have begun to connect to the financial system. And he talks about how regulators are responding to their rapid growth.

I want to talk today about whether the world of ‘crypto finance’ poses risks to financial stability.

Cryptoassets have grown by roughly 200% in 2021, from just under $800 billion to $2.3 trillion today. They have grown from just $16 billion 5 years ago. $2.3 trillion of course needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at around $1.2 trillion in 2008.

See: 

When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice. They have to think very carefully about what could happen and whether they, or other regulatory authorities, need to act.

At the same time, they need to be careful not to over-react – particularly when faced with the unfamiliar. We should not classify new approaches as ‘dangerous’ simply because they are different. Innovation, technology and new players can tackle longstanding frictions and inefficiencies and reduce barriers to entry. Throughout history, they have been key to driving improvement and to increasing resilience in financial services.

I will give you my conclusions at the outset. Crypto technologies offer a prospect of radical improvements in financial services. However, while the financial stability risks are still limited, their current applications are now a financial stability concern for a number of reasons.

Cryptoassets are growing fast and there is rapid development of new applications for the technology. The bulk of these assets have no intrinsic value and are vulnerable to major price corrections. The crypto world is beginning to connect to the traditional financial system and we are seeing the emergence of leveraged players. And, crucially, this is happening in largely unregulated space.

Unbacked cryptoassets

Unbacked cryptoassets make up nearly 95% of the $2.3 trillion.

They are essentially non-replicable strings of computer code that can be owned and transferred without intermediaries. Bitcoin, of course, is the most prominent example, but there are now nearly eight thousand unbacked cryptoassets in existence. These have no intrinsic value – that is to say there are no assets or commodities behind them: the value of the cryptoasset is determined solely by the price a buyer is prepared to pay at any given moment.  As a result, their value is highly volatile.

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And while retail investment predominates in this market, there are signs of growing institutional investor interest, with these investors now thinking about whether to have crypto in their portfolio. More complex investment strategies are beginning to emerge, including crypto futures and other derivatives.

At the same time, core wholesale finance and financial market infrastructure firms are putting their toes in the water. Several global banks are offering, or are planning to offer, digital asset custody services. Some international banks have started to, or are looking at, trading cryptoasset futures and non-deliverable forwards; and offering wealth management clients cryptoasset investments, following client demand. Others have developed exchange platforms facilitating matched trades, or offer customers access to other crypto exchanges through their apps. Leading payment firms are also exploring ways of allowing people and businesses to use certain stablecoins for payments and for the settlement of transactions within their networks.

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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