Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Regtech, Compliance, Governance
CSA Reminds Crypto-backed Lenders of Securities Law Duties
Crypto Regulation | Oct 23, 2025
Image: Freepik
Canadian Regulators Caution Crypto-backed Lending Platforms
The Canadian Securities Administrators (CSA) issued a reminder to platforms offering loans secured by crypto assets that their operations may fall under securities law and that investors should confirm registration or exemptive relief before doing business, setting the tone for how the regulators see the market operating in Canada.
The CSA says it is already engaging with platforms that let borrowers use crypto as collateral. Collateral usually exceeds the loan amount and is transferred to the platform. Depending on the business model, that activity can count as trading or a distribution of securities, triggering registration and prospectus obligations into play.
See: CSA Proposes $50K Harmonized Self Certified Investor Exemption
Operating without registration or relief can expose customers to weak safeguards over collateral and poor disclosure of loan terms. Investors should protect themselves by checking the list of crypto firms authorized to do business with Canadians. One example of a registered crypto-backled lending platform that received exemptive relief on April 1, 2025 is APX Inc.
Advised to Work with Securities Regulators
If a firm offers or plans to offer crypto collateralized loans, the CSA expects early contact with regulators. Firms can use the CSA Financial Innovation Hub to test ideas inside the regulatory framework and to understand whether exemptions fit their model.
The CSA's caution is blunt. Avoid the gray zone. Engage, document controls, and be clear with customers. Firms that ignore this process risk violating securities law and facing action.
Customers should ask how collateral is held, what happens on default, and whether the platform is registered or operating under relief. Yield is only part of the story. Safeguards and disclosure matter more when assets move off your wallet and onto a platform’s balance sheet.
Crypto Lending Rules Diverge
Regulators around the world share the same goal of protecting investors in crypto lending markets, but they’re taking different routes to get there. A few jurisdictional examples below.
See: Takeaways from the SEC’s Crypto Custody Roundtable
Canada
Canadian regulators say loans backed by crypto can sometimes fall under existing securities laws. If a platform takes custody of assets or offers returns tied to their value, it likely needs to register or obtain exemptive relief. This is not a new classification but an application of existing securities law to a new asset form.
United States
In 2022, the U.S. Securities and Exchange Commission fined BlockFi $100 million and told the firm to register after finding its crypto interest accounts were deemed unregistered securities. Since that decision, U.S. regulators have generally treated crypto lending programs that reuse client assets as securities offerings requiring registration and disclosure.
United Kingdom
The Financial Conduct Authority has said that firms offering crypto-backed loans may come under its consumer credit or investment activity rules if they handle client assets or promote these products to the public. It also warns that companies paying interest on crypto must register under the Money Laundering Regulations or stop serving retail users.
Conclusion
To reduce legal risk, map the business model against securities triggers, document custody and collateral controls, and prepare clear disclosures that customers can understand. Engage early with regulators to confirm registration or to request exemptive relief.
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 aa 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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Bank of Canada’s PSP Registry Goes Live Under RPAA
RPAA | Oct 21, 2025
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Bank of Canada Registry Highlights Canada-led Retail Payments Fintech Ecosystem Under RPAA Oversight
On October 2025, the Bank of Canada (BoC) launched the first public Registry of Payment Service Providers (PSPs), a key milestone under the Retail Payment Activities Act (RPAA). The registry lists all PSPs formally registered to operate under the new retail payments framework. The database is updated regularly and can be accessed via the Bank’s official site at the PSP Registry.
The BoC also published an active list of PSP applicants currently under review, available at the applicants under review page. These applicants are subject to preliminary oversight requirements but are only required to meet full reporting obligations once registration is finalized.
Early Landscape of Registered Providers
According to the registry’s initial snapshot, a total of 320 PSPs have been registered to date. Of these, 259 (80.9%) are headquartered in Canada, while 43 (13.4%) are based in the United States, and 9 (2.8%) in the United Kingdom. The remainder represent smaller international participation from Singapore, Ireland, Brazil, Latvia, the Philippines, Switzerland, Belgium, and South Korea.
See: CMA Lessons on Competition and Growth for Canada
This mix shows that the RPAA’s first tranche of providers is mostly domestic, reflecting the strength of Canada’s homegrown fintech payments sector while integrating a limited number of major international players. The balance of local and foreign PSPs also highlights the regulatory gateway now established for cross-border payment innovation.
Combined Registry and Applicant Overview
The combined data from the Bank of Canada’s PSP Registry and the applicants under review provides a broader picture of participation under the Retail Payment Activities Act, and deeper insight of the provider demand and distribution.
Canada continues to lead with the majority of registrations followed by the United States and the United Kingdom. This balance reflects both the maturity of domestic fintech operations and growing international engagement with Canada’s payments oversight framework.
See: Canada’s Payments Innovation Push Gains Speed
The table data below summarized by country shows how Canada accounts for roughly 84% of all PSP entities registered or in review, while international applicants from the United States, the United Kingdom, and other jurisdictions signal increasing cross-border participation.
| Head office country | Registered PSPs | Applicants Under Review | Total PSP Entities | Share (%) |
| Canada | 259 | 1095 | 1354 | 84.26 |
| United States of America (the) | 43 | 105 | 148 | 9.21 |
| United Kingdom of Great Britain and Northern Ireland (the) | 9 | 30 | 39 | 2.43 |
| Singapore | 2 | 7 | 9 | 0.56 |
| Hong Kong | 0 | 7 | 7 | 0.44 |
| Latvia | 1 | 3 | 4 | 0.25 |
| United Arab Emirates (the) | 0 | 4 | 4 | 0.25 |
| Estonia | 0 | 3 | 3 | 0.19 |
| Lithuania | 0 | 3 | 3 | 0.19 |
| Spain | 0 | 3 | 3 | 0.19 |
| Nigeria | 0 | 2 | 2 | 0.12 |
| Cyprus | 0 | 2 | 2 | 0.12 |
| Isle of Man | 0 | 2 | 2 | 0.12 |
| Australia | 0 | 2 | 2 | 0.12 |
| Korea (the Republic of) | 1 | 0 | 1 | 0.06 |
| Poland | 0 | 1 | 1 | 0.06 |
| Yemen | 0 | 1 | 1 | 0.06 |
| Sweden | 0 | 1 | 1 | 0.06 |
| San Marino | 0 | 1 | 1 | 0.06 |
| Czechia | 0 | 1 | 1 | 0.06 |
| Netherlands (Kingdom of the) | 0 | 1 | 1 | 0.06 |
| Luxembourg | 0 | 1 | 1 | 0.06 |
| Malta | 0 | 1 | 1 | 0.06 |
| Malaysia | 0 | 1 | 1 | 0.06 |
| Kazakhstan | 0 | 1 | 1 | 0.06 |
| Israel | 0 | 1 | 1 | 0.06 |
| China | 0 | 1 | 1 | 0.06 |
| Belgium | 1 | 0 | 1 | 0.06 |
| India | 0 | 1 | 1 | 0.06 |
| Saint Vincent and the Grenadines | 0 | 1 | 1 | 0.06 |
| Japan | 0 | 1 | 1 | 0.06 |
| Denmark | 0 | 1 | 1 | 0.06 |
| Mauritius | 0 | 1 | 1 | 0.06 |
| Gibraltar | 0 | 1 | 1 | 0.06 |
| Ireland | 1 | 0 | 1 | 0.06 |
| Brazil | 1 | 0 | 1 | 0.06 |
| Philippines (the) | 1 | 0 | 1 | 0.06 |
| Switzerland | 1 | 0 | 1 | 0.06 |
| Cayman Islands (the) | 0 | 1 | 1 | 0.06 |
Regulatory Alignment and Payments Canada Integration
Registered PSPs are now under supervisory assessment by the Bank of Canada and must comply with RPAA requirements on operational risk management, safeguarding of end-user funds, and reporting. Additional guidance and summary documents are available under the Bank’s retail payments supervision.
See: How Competition Powers Canada’s Economic Growth
The registry’s release coincides with the expansion of Payments Canada membership eligibility, effective September 29, 2025. Under this change, registered and supervised PSPs are now eligible to join Payments Canada, alongside credit union locals and clearing system operators overseen by the Bank. The update outlined in the Statement by the Minister of Finance, connects the RPAA framework with Canada’s broader payment system modernization goals.
The live PSP registry is a major step towards a transparent and accountable retail payments system designed to enhance trust and innovation. With a majority of Canadian fintechs now operating under Bank of Canada oversight.
Competitiveness Outlook
As Senior Deputy Governor Carolyn Rogers noted in her recent remarks before the Canadian Club Toronto, competition is a critical force in improving productivity and efficiency across the economy.
While the new registry helps level the playing field by providing a formal pathway for smaller fintechs to operate alongside larger incumbents in a regulated environment, there is limited number of PSPs currently registered under the Retail Payment Activities Act raises questions about Canada’s ability to compete globally in payments innovation. With only 259 Canadian payment providers currently registered, the framework captures a small fraction of the fintech firms operating in the country.
Larger and more established companies are the most likely to meet the Bank of Canada’s supervision requirements, while smaller fintechs face higher barriers to entry. These include detailed operational risk controls, safeguarding of end-user funds, and ongoing reporting costs that can be more challenging to address for early stage businesses.
See: Regulating for Growth by Understanding Innovation
In other markets such as the United Kingdom and the European Union, regulators use tiered systems that allow smaller firms to start with lighter oversight and scale up as they grow. Canada does not yet have this flexibility with the RPAA a single registration and supervision framework for all payment service providers (PSPs). Without an adjustment, the current model could reduce competition and slow the growth of homegrown payment innovators, as global players expand into the Canadian market.
The Bank of Canada’s framework seems stable and transparent but expanding participation over time will be key to ensuring the RPAA supports Canada’s fintech competitiveness.
Outlook
As more PSPs complete the review process, the registry will expand and evolve, providing clearer insight into Canada’s payments ecosystem. For fintech stakeholders, this signals that full RPAA implementation is moving from policy design to operational reality.
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 aa 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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Why Policy Scenarios Now Matter for Fintech Strategy
Fintech Risks | Oct 20, 2025
Image: Freepik/Rawpixel.com
Tiff Macklem Fireside Implies Fintechs Must Plan For Multiple Policy Outcomes as Trade and Inflation Risks Rise
On October 16, 2025, Bank of Canada (BoC) Governor Tiff Macklem joined Adam Posen at the Peterson Institute for International Economics (PIIE) in Washington for a public conversation about Canada’s economic outlook and global trade. Macklem said new tariffs, slower trade, and changing supply chains are impacting the Canadian economy.
As a result, he explained that the BoC is now using several possible economic paths instead of one fixed forecast because global uncertainty has become constant. The new approach was outlined in the Bank’s July 2025 Monetary Policy Report and compares what could happen if tariffs stay the same, ease, or rise, and indicates the impact of each option on inflation, output, and interest rates.
Canada’s Four Challenges in a Divided World
Macklem described four forces that will impact the next 10 years for Canada:
1. Trade now clusters around three main hubs led by the United States, China, and the European Union. The United States still dominates world finance even as investors question its safe haven status, and other countries like Singpore pushing above their weight.
See: Data Shows Tariffs Are Threatening Early Stage Innovation
2. Global trade and money flows are becoming uneven again (a recurring structural issue). Some regions keep running big surpluses while others, including North America, rely more on borrowing. Macklem said this growing imbalance adds risk to the global financial system and limits how much small economies like Canada can control their outcomes.
3. He said higher tariffs and unpredictable policy weaken demand, raise costs, and reduce the efficiency of supply.
4. Canada is feeling these pressures through weaker exports, slower investment, and lower productivity growth, outcomes that no interest rate decision can reverse.
From One Forecast to Several Possible Futures
Traditional forecasts assume one view of the world. Macklem explained that the Bank now works with three possible paths. One assumes current tariffs remain. One assumes tensions ease. One assumes further escalation.
See: Stephen Poloz’s Plan to Fix Canada’s Economy
The aim is to keep inflation expectations stable while helping households and businesses adjust to uncertainty. For fintechs and lenders, strategic business planning must now be built around several credible economic futures too, and not rely on a single base case. Funding, pricing, and credit policies should be tested against each path to stay resilient no matter which reality unfolds.
Trade Uncertainty and Financial Risk
Macklem explained that new tariffs and complex rules are adding cost and delay at the Canada–U.S. border, disrupting supply chains. Firms that once relied on integrated supply chains now need new suppliers, new routes, and stricter compliance to maintain trade eligibility. That adds cost and delays that ripple across sectors. Even service firms are affected through their clients and vendors.
For fintechs offering trade finance, payments, or working capital products, this environment creates opportunity but also exposure to new risks. There is demand for tools that make international transactions faster and more transparent, but also new risks tied to client sectors under pressure.
Competitiveness Through Productivity and Reform
The Governor stressed that raising productivity is now essential. He pointed to faster project approvals, fewer internal trade barriers, and stronger transport links as priorities to open new pathways.
See: Canada’s Public Sector Costs and Productivity Gap
The Bank’s recent reports say that fixing long-term barriers in the economy like slow project approvals or weak competition can improve growth more than changing interest rates (aka, monetary policy).
Fintechs can build solutions that help reduce administrative frictions, such as digital identity and onboarding tools can eliminate duplication between provinces. Compliance automation and regulatory technology can shorten approval times. Procurement platforms can help smaller firms reach national customers. These are examples of direct responses to the barriers that Macklem said must be addressed.
Neutral Rate, Cost of Capital, and Planning
Macklem also spoke about the neutral interest rate which is the level that keeps inflation stable without stimulating or slowing the economy. He said it may not align between Canada and the United States because productivity growth and fiscal policies differ. That divergence affects long term funding costs and the flow of investment capital.
See: How Competition Powers Canada’s Economic Growth
For fintechs that borrow in U.S. dollars or rely on foreign investors, funding costs and access to cash can change even if central banks don’t move rates. The safest approach is to plan for different interest rate outcomes instead of assuming Canada and the U.S. will always move together.
Digital Money and the Priority of Trust
When asked about digital assets, Macklem said the Bank’s work on stablecoins and a possible central bank digital currency focuses on preserving trust and value. The principle of the singleness of money means that one Canadian dollar must hold the same worth everywhere, whether in cash or digital form.
Stablecoin systems must avoid runs and guarantee convertibility. For fintech developers and innovators, it means creating systems that work within the regulated financial system, not outside. The most promising area is making international payments faster, cheaper, and clearer, while ensuring every digital dollar is fully backed and can always be redeemed.
Why Case Planning Matters For Fintech
Uncertainty is no longer an exception but a normal condition for business and policy. Every possible trade path changes inflation, growth, and the cost of capital. Fintech founders, investors, and lenders must build this thinking into their models and operations. That includes ready plans for each scenario, triggers for risk adjustments, and playbooks for client support when tariffs or rates move unexpectedly.
See: The Crisis Canada and Fintech Can’t Afford to Waste
The firms that incorporate this discipline and governance will not only manage volatility better but also build trust with investors and customers who highly value predictability in uncertain times.
Outlook
It's time for Canada to demonstrate adaptability, and treat uncertainty as a given design factor instead of a sudden surprise. Canada’s financial ecosystem, from established lenders to digital innovators, must treat uncertainty as a normal part of planning. Fintechs that adopt scenario planning, streamline processes, and improve real economy efficiency can help Canada compete globally even as the trading system fragments.
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 aa 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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Canada Launches First National Anti-Fraud Strategy
Anti-Fraud | Oct 20, 2025
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Ahead of Budget 2025, Canada Unveils a National Anti-Fraud Strategy and New Financial Crimes Agency
On October 20 2025, the Department of Finance Canada released plans for a National Anti-Fraud Strategy that will be introduced through Budget 2025. The initiative is designed to combat growing financial fraud, scams, and economic abuse that affects millions of Canadians every year.
According to the Canadian Anti-Fraud Centre, Canadians lost $645 million to fraud in 2024 (almost a 300% increase since 2020), noting only 5-10% of scams are ever reported. The government says the new strategy aims to reverse that trend through prevention, data sharing, and stronger oversight across financial and digital channels.
Honourable Gary Anandasangaree, Minister of Public Safety:
“Today’s financial criminals make use of every modern tool at their disposal to try to defraud Canadians. Our government’s new Strategy is tackling head-on the threat posed by these fraudsters. A stand-alone Agency to fight financial crime is critical to maintaining confidence in our financial system, and keeping people, and their money, safe.”
Planned Rule Changes and New Enforcement Agency
As an early step, Budget 2025 will propose amendments to the Bank Act that would require banks to:
See: When Fraud Controls Freeze Millions of Bank Accounts
- Establish policies to detect and prevent consumer-targeted fraud
- Obtain express consent before enabling account transfer or payment features that could be exploited by scammers
- Allow customers to adjust transaction limits and disable unwanted account capabilities
- Collect and report fraud data to the Financial Consumer Agency of Canada
The changes are expected to strengthen consumer control and protection, especially for seniors, newcomers, and other vulnerable groups.
The government also intends to create a new Financial Crimes Agency by spring 2026. This federal agency would lead investigations into money laundering, organized crime, and online fraud, bringing together financial, legal, and law enforcement expertise to recover illicit funds. Rules to formally establish the agency is expected in 2026 after consultation with the Ministers of Justice and Public Safety.
Addressing Economic Abuse
The government will also work with banks and stakeholders to develop a voluntary Code of Conduct for the Prevention of Economic Abuse. The code will set clear expectations for how financial institutions identify and respond to economic abuse, a type of financial control and coercion that often targets women and seniors. Work will be guided by principles of victim focused support, collaboration, and financial empowerment.
See: Stingray Security Wins ScamShield Challenge
Banks (perhaps with the help of financial technology providers) will play a key role as front-line institutions that can detect early signs of financial control or distress and provide safe guidance for clients to regain independence.
Implications for Canada’s Fintech Ecosystem
For fintech companies, the emerging anti-fraud legislation means there's a strong focus on consumer trust and financial resilience. Stricter fraud controls for banks will also apply to their fintech partners through compliance expectations and data standards.
Fintech firms that build strong fraud detection and digital ID tools will have an advantage, finding it easier to work with banks while everyone benefits from a safer financial system. Companies that are transparent, secure, and possess strong governance will earn public and institutional trust.
See: Anatomy of Rising Deepfake Scams in Crypto and Fintech
The creation of a Financial Crimes Agency also opens new opportunities for collaboration between the public and private sectors on cyber risk, data sharing, and proceeds of crime recovery.
Conclusion
While the full framework, funding, and timeline details will be presented at Budget 2025, protecting Canadians from financial fraud is a national priority, raising the minimum bar for a trusted digital economy.
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 aa 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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BTQ Technologies Announces Quantum Safe Bitcoin Demo
Quantum | Oct 16, 2025
Image: Freepik/pikisuperstar
Vancouver-based BTQ Technologies Tests a Quantum Safe Version of Bitcoin
On October 16, 2025, Canadian company BTQ Technologies announced the first public demonstration of a quantum safe Bitcoin network using post quantum cryptography approved by the US National Institute of Standards and Technology. BTQ says its new Bitcoin software replaces current encryption with ML DSA, a stronger digital signature designed to resist future quantum attacks that meets NIST’s new post quantum security standards. The firm believes this advance could protect the $2.4 trillion dollar Bitcoin market from quantum attacks expected later this decade.
Quantum Risk and What's at Stake
Quantum computing promises huge advances, but with it comes the threat to current cryptography, including what bitcoin's network is secured by. Researchers aim for million qubit systems before 2030, a level that could make today’s digital signatures vulnerable. The Federal Reserve study on harvest now decrypt later risks explains how attackers can store blockchain data for future decryption once quantum computers mature. BTQ is raising alarm bells that more than 6.5 million Bitcoin already expose public keys, worth hundreds of billions of dollars, and could be stolen if quantum systems gain that capability.
BTQ and Its Technical Demo
BTQ is pushing quantum security for digital assets. Earlier in 2025 it launched the Quantum Stablecoin Settlement Network (QSSN) to protect stablecoins under quantum threats. The company also leads standard efforts and was recently appointed chair of the QuINSA standards group to help create quantum-safe blockchain policies.
In its demo, BTQ built a version of Bitcoin where every signature uses ML DSA, a NIST-standardized post quantum algorithm. Their prototype supports wallet creation, transaction signing, mining, and verification under the new scheme. To accommodate larger signatures they increased script limits and block structure. The company released details in its Quantum Safe Bitcoin press release.
See: Google’s Willow Quantum Chip Breakthrough
Despite the excitement experts are cautious as no independent cryptographic audit or open repository has confirmed BTQ’s claims. Changing the signature scheme that secures Bitcoin would require widespread agreement among miners, developers, and exchanges, a process that historically takes years. The firm describes its system as a demonstration, not a replacement. Until peer review validates its performance and compatibility, BTQ’s project is more like a promising proof of concept rather than a verified production network.
What It Means for Fintech and Policy
Quantum readiness is already entering regulatory planning. The National Security Memorandum on quantum computing directs federal agencies to prepare for migration to NIST approved cryptographic standards. If BTQ’s model scales, it could guide how institutions and regulators protect digital assets. For investors this is an early look at how future value may depend on verified quantum resilience.
Outlook
BTQ plans to launch its test network before the end of 2025, followed by enterprise pilots and a main network rollout in 2026. Whether Bitcoin developers adopt these standards is still uncertain, yet the announcement places Canada at the center of the conversation about safeguarding global digital wealth. The rise of quantum safe assets is evolving into a critical piece of tech that will protect and propel the next decade of digital finance.
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 aa 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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Quebec Decision Challenges Canada’s Crypto Rules
Crypto Asset Policy | Oct 15, 2025
Image: Freepik AI
Quebec Tribunal Ruling Challenging One-Size-Fits-All Crypto Regulations
In August 2025, Quebec’s Financial Markets Administrative Tribunal issued its decision in AMF v. Gagnon et al. that examined whether tokens linked to a crypto trading signal subscription service were investment contracts under Quebec’s Securities Act or not. The respondents ran an online business that sold memberships through social media and a Telegram group, offering automated buy and sell recommendations for digital currencies such as bitcoin. Investors paid recurring fees to receive trading alerts and access private chat rooms.
See: Canada’s Stablecoin Race Enters Critical Phase
The tribunal found that the respondents misled subscribers and exaggerated claims about profit potential without proper registration. However, it also ruled that the tokens and the trading signals themselves weren't securities. Investors acted independently (i.e., placing their own trades), and there was no pooling of funds or shared enterprise that would meet the legal test for an investment contract in Quebec.
It's an important ruling because it draws a clear line between activities that require securities registration and those that do not. The decision has prompted discussion across Canada about how regulators should evaluate crypto asset business models (subscription required).
Decision Rooted In Economic Reality
The tribunal focused on how the Gagnon business actually worked, not how the business is described or the types of tokens involved. The respondents sold subscriptions to a crypto signal service through social media and Telegram. Members paid recurring fees (usually in crypto) to access automated trading alerts and private discussion groups. The tribunal found that subscribers of the service acted independently because they placed their own trades, used their own accounts, and there was no pooling of funds or shared enterprise.
Because the respondents did not issue tokens, manage capital, or control investor profits, the activity did not meet the legal test for an investment contract. The tribunal said speculation alone does not make a trading service or token a security.
See: How Competition Powers Canada’s Economic Growth
David Durand, Founder Durand Lawyers and NCFA Advisor, was interviewed for the Law360 article on legal classification of crypto assets, who argued that each crypto asset and business model must be assessed on its economic reality, not through one universal rule.
“The fact that securities regulations would have scant effect in protecting users on decentralized networks makes it evident that defining crypto assets as a security would provide ineffective regulatory enforcement in this respect. "[Overreaching securities regulation on the crypto asset regime would] likely create a system where onerous requirements are placed on users of such assets, with an end result of suppressing innovation [in financial technology and financial capital to leave Canada seeking more favourable environments]."
“The important point here is that the tribunal says a crypto asset is not an investment contract. However, when we criticize the act of trading an asset, we are referring to the investment contract in relation to the person and not the object or the very nature of the crypto asset. The implications are that we are moving in the right direction in terms of the fact that crypto assets were not an investment contract.”
Implications Across Canada
Although the decision applies only in Quebec, its reasoning may influence regulators across Canada. The Canadian Securities Administrators have been moving toward coordinated rules for crypto trading platforms, but this ruling highlights the limits of the CSAs current approach when activities vary so widely in design.
The tribunal also said regulators need stronger evidence before using enforcement tools like freezing orders. It ruled that authorities must show clear proof before stopping a business from operating. This could set a new standard for fairness in future crypto cases.
See: Canada to Enforce Cryptoasset Reporting by 2027
For fintech founders, the ruling gives clearer guidance on what falls inside or outside securities law. Businesses that offer decentralized tools, such as trading signal services, software systems, or network platforms are less likely to be treated as securities, if users of those tools remain in control of their own money and avoid profit sharing and collective investment components.
For regulators, the case is a reminder to focus on real misconduct instead of labelling all crypto activity as securities by default.
Comparison with Ripple and MiCA
The Gagnon reasoning parallels the SEC v. Ripple Labs decision in the United States, where a U.S. court drew a line between tokens sold directly by a company and those traded later on the open market. The court said that how and where a token is sold makes a difference. When people buy directly from the issuer based on its efforts, the sale can fall under securities law, but trades between independent buyers and sellers on exchanges may not.
Europe’s Markets in Crypto-Assets (MiCA) regulation offers another useful example. MiCA builds specific legal categories for utility tokens, payment tokens, and asset-referenced tokens, instead of applying one framework to all.
Read: BIS Proposes Scoring Model for Crypto AML
Canada has yet to create a similar set of purpose-based rules, leaving courts and tribunals to fill the gaps through case law.
Strengthens NCFA's Call for a National Framework
The Quebec tribunal ruling strengthens NCFA's call for a coordinated national digital asset framework that distinguishes between token types and activities. Further, Canada can draw from both MiCA’s structured taxonomy and the functional reasoning used in Ripple and Gagnon. NCFA continues to recommend that policymakers should now focus on:
(1) developing a clear national digital asset taxonomy;
(2) designing safe harbours for compliant innovation;
(3) aligning oversight with international best practices and;
(4) concentrating enforcement on fraud and deception rather than classification disputes.
Canada Must Regulate for Growth
The Gagnon ruling challenges Canada’s regulatory system to evolve beyond the one-size-fits-all treatment of crypto assets. The tribunal recognized that each digital asset and business model carries distinct risks and economic activities.
One brush does not fit all. Crypto assets differ in structure, function, and purpose. Regulation must be designed for growth, not just enforcement. As NCFA recently argued in “Regulating for Growth by Understanding Innovation”, good regulation should reward experimentation, promote competition, and provide safe entry points for new entrants, not block innovators out of fear.
If Canada wants to compete in digital finance, it must build laws that reflect how crypto businesses actually work, support new ideas, and focus on misconduct, not label everything a security first.
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 aa 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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CZ Pardon Reports Stir White House Debate
CZ | Oct 14, 2025
Image: Freepik/wirestock
Reports of a Potential Trump Pardon for Former Binance CEO Changpeng Zhao
Changpeng Zhao (known as CZ) pleaded guilty in November 2023 to a single count of violating the Bank Secrecy Act after U.S. authorities found Binance had failed to maintain effective anti-money laundering controls. He stepped down as CEO and was sentenced in April 2024 to four months in federal prison while paying a $50 million fine. Binance also paid $4.3 billion to settle related charges with the Department of Justice and other agencies.
In May 2025, Zhao stated publicly that he had applied for a presidential pardon from Donald Trump. The U.S. Senate Banking Committee confirmed the filing’s existence in a letter dated May 15, 2025, asking the Department of Justice and the White House to clarify whether the request was being considered. The senators cited potential conflicts of interest tied to Trump family business ventures connected to crypto ventures associated with Binance.
New Update Heating Up
On October 10, 2025, journalist Charles Gasparino reported on X that White House discussions about a possible pardon were “heating up.” The New York Post followed with a story two days later describing alleged internal debates over optics as the Trump administration manages several crypto-related policy files.
The article references unnamed sources close to both Zhao and Trump, who claim the president is sympathetic to Zhao’s case but mindful of potential conflicts due to family business interests in the crypto sector.
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No formal statement from the White House, the Department of Justice, Binance, or Zhao’s legal team has confirmed these discussions. The White House press office maintains a standard position of not commenting on active or potential pardons. Therefore, these claims remain based only on Gasparino's report and subsequent media coverage.
Why the Story Matters for Crypto Policy
Even without confirmation, the story matters because a pardon could erase Zhao’s criminal record, reopening the possibility for U.S. financial institutions to engage with Binance or its affiliates under less restrictive compliance terms.
It could also influence broader perceptions of how the U.S. balances enforcement with innovation across the $4 trillion global digital asset market. The Senate Banking Committee’s letter highlights bipartisan concern about transparency in how executive clemency intersects with crypto business interests, and spotlights growing concerns between pro-market reform vs accountability for compliance gaps in digital finance.
Current Outlook
As of October 14, 2025, verified information is limited to Zhao’s conviction, sentencing, fines, and his publicly acknowledged pardon petition. Otherwise, there is no public record or filing in the Office of the Pardon Attorney showing that any pardon has been granted or is under formal review.
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Until official confirmation appears, the case stands as a reminder that anonymous political reporting must be treated cautiously, especially if it could affect markets and trust in financial governance.
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