2023 Fintech and Financing Conference & Expo

Category Archives: Legal Issues, Regulation, Consultation

OSC Seeks Feedback on 2023-24 Statement of Priorities by December 22

AUM Law | Nov 30, 2022

OSC statement of priorities feedback - OSC Seeks Feedback on 2023-24 Statement of Priorities by December 22The Ontario Securities Commission (OSC) has released its most recent draft statement of priorities (SoP) in OSC Notice 11-797 – Request for Comments Regarding Statement of Priorities for Financial Year to End March 31, 2024.

The draft SoP is open for comment until December 22, 2022, and describes the OSC’s key priority initiatives, broken down into one of the following four strategic goals for the year:

  • Building Trust and Fairness in Ontario’s Capital Markets;
    • A key priority under the first goal relates to advancing work on environmental, social, and governance (ESG) disclosures for reporting issuers.
  • Strengthening Investor Safeguards;
    • set out in the draft SoP is to strengthen investor safeguards. One key priority under this goal relates to the Ombudsman for Banking Services and Investments (OBSI). As indicated earlier this year by press release, the CSA is developing a proposal that will provide OBSI with binding decision making authority.

See:  ISED Launches Competition Act Review: Consultation on the Future of Competition Policy in Canada

  • Adapting Regulation to Align with Innovation and Evolving Markets; and
    • The first key priority continues to refer to the crypto asset sector. Actions next year will involve continued application of regulatory obligations to crypto firms while completing the registration or approval process, including obtaining pre-registration undertakings from firms pending completion of the registration or approval process. Actions also include implementing and refining the program for ongoing oversight of crypto asset trading platforms. A stated action may also specifically impact investment funds, as the regulators intend to develop a regulatory framework with appropriate safeguards for how investment funds invest in crypto assets.
  • Enabling the Organization to Deliver Effective Regulation.
    • enabling the organization to deliver effective regulation, the OSC continues to review strategies to attract and retain talent, execute on its inclusion and diversity strategy, and integrate data and processes to support effective decision making and risk monitoring.

Continue to the full article --> here


NCFA Jan 2018 resize - OSC Seeks Feedback on 2023-24 Statement of Priorities by December 22The 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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Imminent Litigation Challenges of the Metaverse

Blakes | Karine Russell and Christopher DiMatteo | Nov 23, 2022

Image Unsplash Javier Peñas virtual reality - Imminent Litigation Challenges of the Metaverse

Image: Unsplash/Javier Peñas

While a virtual-reality parallel universe is likely several years away, entirely new areas of law have developed to address the online world. Cyberattack or data breach class actions have become common.

  • Privacy litigation:  If the metaverse develops as anticipated, it will involve the collection of an unprecedented amount of data about users. Platforms could (as they do now) collect data about what users buy in the metaverse, what they look at, and their conversations with other users. However, because a user’s access to the metaverse would be through a headset, much more data could be collected – for example, relating to user movements, physiological responses and perhaps even brainwaves – that will give platforms a deeper understanding of their users’ thought patterns and behaviours.
    • Tort of intrusion upon seclusion where a defendant intentionally intrudes into the plaintiff’s private affairs in a manner that would be highly offensive to a reasonable person.  In addition to a data breach scenario, it is possible to envision other metaverse cases of intrusion upon seclusion. If it is possible to buy virtual real estate in the metaverse, for example, a defendant could be liable for snooping in a plaintiff’s virtual home.
    • Could a metaverse operator be liable for negligently failing to prevent a cyberattack that resulted in the compromise of user data?
    • If a metaverse user breaches the privacy of another user, could the platform be liable for failing to prevent the breach?

See:  Proof of Humanity: Aftermath Islands Metaverse Launches Blockchain-based Facial Recognition

  • Product liability: The metaverse is projected to result in a vast market for virtual and physical products available for purchase and use by customers.  Accordingly, developers, manufacturers, licensors, vendors and others in the industry may be at risk of metaverse-related product liability claims brought by metaverse participants and users of these products.
    • claims could result from scenarios where individuals sustain personal injuries while immersed in the virtual or augmented reality of the metaverse world
    • property damage or economic loss claims could arise where participation in the metaverse or use of related hardware gives rise to an incident that destroys property.  Metaverse users may also be sued by other users for their conduct in the metaverse as it relates to another person or avatar.

Continue to the full article --> here


NCFA Jan 2018 resize - Imminent Litigation Challenges of the MetaverseThe 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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NYT DealBook Summit: Sam Bankman-Fried Interviewed About the Collapse of FTX

New York Times | Dec 1, 2022

SBF interviewed at NYT DealBook Summit - NYT DealBook Summit:  Sam Bankman-Fried Interviewed About the Collapse of FTX

Image: NYT DealBook Summit

Sam Bankman-Fried, co-founder of the cryptocurrency firm FTX, gave his first live interview since his company filed for bankruptcy. Andrew Ross-Sorkin of The New York Times asked Bankman-Fried to address allegations of fraud and mismanagement and whether the people and organizations who are owed money will get any of it back.

 

 

Watch the full interview from the DealBook Summit event.


NCFA Jan 2018 resize - NYT DealBook Summit:  Sam Bankman-Fried Interviewed About the Collapse of FTXThe 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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Coinsquare Announces Data Security Breach to Customers

Finance Magnates | Arnab Shome  | Nov 28, 2022

Data breach hack - Coinsquare Announces Data Security Breach to CustomersCoinsquare has become the latest victim of a security breach that has resulted in compromised users' personal details, the platform confirmed last weekend by sending an email to its customers.

  • Data Breach: The exchange detailed that the breach exposed "customer names, email addresses, residential addresses, phone numbers, dates of birth, device IDs, public wallet addresses, transaction history, and account balances."
    • However, the crypto exchange reported some "unusual activity on our platform" on November 19 and underwent unscheduled maintenance. Then, the exchange did not detail if it was a security breach. It also restored full service on Friday ahead of sending emails to costumes about the security breach.
    • Risk: A breach of personal information can also result in more severe individual account targeting. These generally make identity theft and fraud much more accessible. A similar data breach of Australian telecom service provider Optus earlier this year prompted the country's financial market watchdog to warn financial brokers of the rising risks of identity theft.

See:  Suspected Sanctions Breach? The UK Forces Crypto Exchanges to Immediately Report

  • Coinsquare's response: "No passwords were exposed. We have no evidence any of this information was viewed by the bad actor," the email stated, adding: "We note that your assets have always been, and remain, secure in cold storage and are not at risk."
    • The Canadian exchange cautioned the users to change their passwords and enable two-factor authentication (2FA) to ensure safety
    • Coinsquare touts itself to be "Canada's trusted platform to securely buy, sell and trade Bitcoin, Ethereum, and more" and received registration from the Investment Industry Regulatory Organization of Canada (IIROC) a month before.

Continue to the full article --> here


NCFA Jan 2018 resize - Coinsquare Announces Data Security Breach to CustomersThe 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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Big 6 Banks’ say ‘Hole in Financial System’ | Role in Freeland’s Convoy Plan

Canada Today | Naomi Oliver | Nov 25, 2022

Pexels Mohamed Almari hole in system - Big 6 Banks’ say 'Hole in Financial System' | Role in Freeland’s Convoy Plan

Image: Pexels/Mohamed Almari

When Deputy Prime Minister Chrystia Freeland called the chief executive officers of Canada’s Big Six banks on Sunday in February before their government invoked the Emergencies Act, the CEOs stressed that the resources at their disposal were to support that to choke off the money pouring in from the convoy protests were limited.

  • Accounts of at least three calls Ms Freeland made with bank CEOs over an eight-day period are contained in summaries dubbed “readouts” and in Ms Freeland’s handwritten notes from the meetings, which took place Thursday at the Investigating the Use of the Emergency Law.
  • At that moment, banks needed court orders to freeze funds, CEOs said, which are slow to grant. To give banks the ability to freeze funds faster, the government needed to sanction protesters under the same financial crime laws it applies to terrorists, three [bank] CEOs said. They also called on the government to close loopholes in systems to monitor transactions by bringing a wider range of payment providers under stricter regulations.
  • Ms Freeland’s first assignment was an attempt to involve the banks in ending the convoy protests and get the bankers’ help in assessing the severity of the damage to Canada’s economy. Subsequent calls focused on working out the complex mechanisms to stop the flow of money to the protesters.
    • What the CEOs weren’t told on the first call on February 13 was that the government was preparing to use the emergency law to expand banks’ powers to freeze accounts.

See:  NCFA Response to FINTRAC’s ‘Knee Jerk’ Regulations Requiring Donation Crowdfunding Platforms to Register and Comply with AML/ATF Legislation

  • Bank CEOs:
    • TD’s Mr. Masrani stressed that “Canada’s reputation is at risk,” and was echoed minutes later by Canadian Imperial Bank of Commerce CEO Victor Dodig
    • BMO’s Mr White reportedly called the blockades “a national crisis”, urged Ms Freeland to “act immediately” and quoted a US investor who told him: “I will not invest another red cent in your banana republic in Canada”
  • Banks urge government: Prior to the Feb. 13 conference call, TD TD-T, CIBC CM-T and Bank of Nova Scotia BNS-T had privately encouraged the government to bring non-bank payment providers “more clearly” under existing anti-money laundering laws.
    • That day, Mr Masrani told Ms Freeland the “big hole” in the system was those payment providers, including crowdfunding platforms, and CIBC’s Mr Dodig was also pushing for measures that would cover “the entire financial system,” according to an ad. Another CEO added, “Let’s be clear, they will all eventually move to crypto.”

Continue to the full article --> here


NCFA Jan 2018 resize - Big 6 Banks’ say 'Hole in Financial System' | Role in Freeland’s Convoy PlanThe 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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CFTC Says Bitcoin is the Only Commodity | ECB Criticizes Digital Asset Sector for Facilitating Illegal Activity

Cointelegraph | Prashant Jha | Dec 1, 2022

Unsplash André François McKenzie Bitcoin - CFTC Says Bitcoin is the Only Commodity | ECB Criticizes Digital Asset Sector for Facilitating Illegal Activity

Image: Unsplash/André François McKenzie

CFTC has faced a lot of scrutiny in the wake of FTX collapse due to its ties with the crypto exchange and SBF’s efforts to put the committee as the key oversight body for crypto.

  • The chief of the United States Commodity Futures Trading Commission (CFTC), Rostin Behnam, claimed Bitcoin is the only crypto asset that can be viewed as a commodity during an invite-only crypto event at Princeton University, reported Fortune.
    • Behnam’s comments are quite a contrast to his early statements in October, where he claimed Ether could also be viewed as a commodity.

See:  New U.S. Bill Gives Crypto Oversight to the CFTC

  • The CFTC chief’s backtracking of his comments on ETH comes in the wake of heavy scrutiny of U.S regulators and accusations of corruption, with Republican lawmakers accusing the SEC chair of coordinating with FTX “to obtain regulatory monopoly.”
  • Behnam said the committee has limited oversight powers and blamed the “matrix of regulators” as an imperfect system. However, he called for better collaboration among the long list of regulatory bodies to come up with formidable regulations.

Continue to the full article --> here


The Guardian | Alex Hern | Nov 30, 2022

ECB European Bank criticises digital currency sector for facilitating illegal activity

  • The European Central Bank says bitcoin is on an “artificially induced last gasp before the road to irrelevance”, in a scathing intervention arguing against giving regulatory legitimacy to the cryptocurrency.
  • In a strongly worded blogpost, senior European Central Bank (ECB) staffers Ulrich Bindseil and Jürgen Schaaf criticised bitcoin for being a hotbed of illegal transactions that brings reputational risk for any bank that gets involved with the sector.

See:  ECB Publishes Macroprudential Bulletin on Stablecoins, Climate Risk, and DeFi

  • German newspaper Handelsblatt, Bindseil and Schaaf argue: “the risks of crypto assets are undisputed among regulators”.

Since bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms and thus should not be legitimised

Continue to the full article --> here


NCFA Jan 2018 resize - CFTC Says Bitcoin is the Only Commodity | ECB Criticizes Digital Asset Sector for Facilitating Illegal ActivityThe 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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Adapting IOSCO Principles to Digital Assets Markets

IOSCO | Nov 2, 2022

applying IOSCO principles to digital assets Singapore fintech festival 2022 - Adapting IOSCO Principles to Digital Assets MarketsThe International Organization of Securities Commissions (IOSCO) has published a speech by Tuang Lee, Chair of IOSCO Fintech Task Force, on applying and adapting IOSCO principles to digital asset markets.

  • Digital assets:  These refer to anything of value whose ownership is represented in a digital or computerised form, through a process called tokenisation. Broadly speaking, digital assets can refer to anything, including real assets like artwork and property, but today our primary focus is on crypto-assets and DeFi.
  • International scrutiny:  On a global level, the International Monetary Fund (IMF) and the Financial Stability Board (FSB) are calling for more regulation of this sector. The FSB recently published, on 11 October 2022, two consultation papers on the international regulation, supervision and oversight of crypto-assets activities and markets – from a financial stability perspective.

See:  Global Securities Wathdog IOSCO to Target Crypto Platforms

  • IOSCO Fintech task force: As the global standard setter for the international capital markets, IOSCO sets the core Objectives and Principles,1 along with supporting recommendations and guidance, on how to regulate capital markets activities and associated risks (together, IOSCO’s principles). Our members adopt these principles, distilling them into detailed regulations domestically.
    • IOSCO has the mandate and a clear  roadmap to explore investor protection and market integrity issues in financial markets.
    • We have established two workstreams under our roadmap. The first on “Crypto and Digital Assets” is led by the UK Financial Conduct Authority (UK FCA). The second, covering “DeFi Products and Services” is led by the US Securities and Exchange Commission (US SEC).

  • Examples of key risks:
    • We are seeing many instances of market manipulation, wash trading and insider trading. For instance, a platform employee may be aware of the potential listing of a certain coin and may use the information to invest in the coin and make a quick profit.
    • Another key risk concerns conflicts of interest. Conflicts of interest are particularly egregious in the context of crypto-asset service providers. Many of these so-called exchanges perform multiple roles that give rise to conflicts of interest. For example, trading platforms often provide brokerage services, custody and proprietary trading under a single roof – they also engage in the issuance of tokens, lending activities and complex re-hypothecation arrangements with client assets.

See:  CPMI and IOSCO publish final guidance for stablecoins

  • Like my last example on insider trading, there are existing IOSCO principles that already apply. The challenge is in determining the right level of guidance to provide. For instance, whether platforms should continue to be able to perform their own proprietary trading. Some jurisdictions have already proposed to disallow this. In addition, should platforms be allowed to list tokens which they have active interest in, and if so, what they need to disclose to users of their platforms?

Download a PDF copy of the Speech --> here


NCFA Jan 2018 resize - Adapting IOSCO Principles to Digital Assets MarketsThe 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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