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
BCSC Fines Fraudulent Crypto Platform ezBtc $18 Million
Enforcement | Dec 4, 2024
Image: Freepik
BC Securities Commission Issues $18.4M Penalty for Crypto Platform ezBTC and Founder for Fraudulent Practices
On Dec 2, 2024, the British Columbia Securities Commission (BCSC) announced an $18.4 million CAD fine to BC-based crypto platform, ezBtc and David Smillie, for misappropriation of investor funds. A BCSC panel made the decision and issued the order on November 27, 2024 for what is now known as the largest fine against a cryptocurrency platform in Canada to date, surpassing previous fines such as $6 million CAD penalty issued to Binance by Canada's Financial Transactions and Reports Analysis Centre (FINTRAC) for anti-money laundering compliance failures.
Fraud Uncovered
David Smillie and his company, ezBtc (registered as 081627 B.C. Ltd.), told customers that their crypto assets were safe in cold storage but it was a blatant lie. Instead, over 935 Bitcoin and 159 Ether were funnelled to personal accounts and used for personal spending including gambling. The BCSC said this was serious fraud that damaged trust in the market. Smillie and ezBtc were found guilty of fraud under section 57(b) of the British Columbia Securities Act.
BCSC Panel said:
”In this case, the respondents’ misconduct eroded trust in the capital markets."
See: Alberta Launches ScamSheild Investor Protection Challenge
Customer testified:
"[I experienced] loss of trust in bitcoin for sure, crypto currency in general, even banking to some degree.”
Penalties and Fines
Smillie didn't even show up to his own hearing and was represented by his lawyer Cody Reedman. Below is the punishment. Note that the panel wasn't aware if David Smillie could pay the fine or not when they issued:
- A $10.4 million disgorgement fine was issued to Smillie and ezBtc to replay the equivalent value of the misappropriated funds/assets.
- An additional $8 million fine was issued to Smillie to serve as a deterrent against future misconduct.
- David Smillie is also permanently barred from trading, promoting, or holding positions in the securities market except for personal investments made through a registered dealer.
As of now, there is no public information about any criminal charges and the BCSC didn't disclose whether or not they recommended criminal charges to law enforcement agencies.
5 Ways to Spot a Fraudulent Crypto Platform
Stay alert and aware. Do your research and homework. If you suspect something is wrong, better to be safe than sorry. Walk away and consider alerting authorities for review.
See: Fraud Prevention Month: CSA encourages Canadians to ask questions before investing in crypto assets
- Over promising (too good to be true) - if a platform 'guarantees' huge profits, be skeptical. All real investments come with some uncertainty but anything that seems too good to be true, probably is.
- Registration with securities regulators? -Check if the platform is properly registered with Canadian regulators to do business with Canadians. If it’s not, it might be operating in a legal gray area.
- Overly confusing or complicated terms - If you can't figure out how your funds will be managed, then best to avoid.
- Pressure tactics - Scammers and fraudsters often try to pressure prospects into making quick decisions without thinking. Legitimate companies should be more professional allowing you to ask questions and take time to evaluate your options.
- Lack of transparency - If a crypto platform doesn't provide clear details of how it operates then that's a massive red flag. This includes websites that are not transparent about their leadership and hide behind numbered companies and don't show their face.
Why This Matters
As the digital asset market grows, clear regulations, investor awareness and robust enforcement are critical to creating a safer and and more trustworthy ecosystem.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
|---|---|---|
 |  |  |
RPAA Registration Deadline Passed See Who Applied
RPAA | Dec 2, 2024
Image: Freepik/rawpixel.com
Retail Payments Supervision Update from the Bank of Canada (Registration Deadline Has Passed)
- The first registration period for payment service providers (PSPs) under the Retail Payments Activities Act (RPAA) ended on November 15 (see BoC's Retail Payments Supervision mandate).
- Companies that missed the deadline may be in violation of Section 104 of the RPAA and could face enforcement measures. See Supervisory framework for registration.
See: Canada’s Retail Payments Boom: $11.9 Trillion Growing Fast
- The Bank of Canada urges unregistered PSPs to apply immediately through the PSP Connect portal to avoid non-compliance.
Who Applied?
The Bank of Canada has published a list of applicants (currently 1187) including many key players in Canada’s retail payment space. This list will be updated regularly and will show all registered PSPs once the transition period ends on September 8, 2025.
PSPs must comply with regulations to manage risks and protect user funds. The Bank of Canada emphasizes the importance of compliance and is committed to supporting PSPs in understanding their responsibilities under the RPAA.
New Guidelines Coming
A new guideline on protecting users' funds will be published shortly which contains key information for payment service providers to meet their responsibilities.
See: Key Findings from 2025 Advanced Payments and Fintech Survey
Stay tuned for more updates...
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Overcoming Barriers to Growth in Financial Regulation
Regulation | Dec 2, 2024
Image: Freepik/storyset
Roadmap for Agile and Innovative Regulators
As new technologies and innovation continually change industries, regulators themselves must adapt or risk falling behind. Without innovating, regulators may inadvertently stifle economic growth and expose markets to new threats, so embracing change should be accepted as a way to keep the system resilient. In a recent Linkedin article called 'Mandate to Innovate, Stephen Scott CEO Starling shared some insights on how regulators can build trust and inspire innovation, and rethink how regulations can support growth, competitiveness, and stability.
Breaking Barriers and Embracing Innovation
Regulators need to change how they approach new technologies like blockchain, artificial intelligence (AI), or decentralized finance (DeFi). Rather than being skeptical and cautious, they should adopt a mindset that welcomes experimentation even if some risks are involved. Shifting risk-adverse cultural attitudes is key to fostering innovation. The UK Science Secretary, for example, setup a Regulatory Innovation Office to speed up approvals and cut unnecessary bureaucracy to help companies and public agencies innovate more easily.
Regulators need to support growth and innovation without compromising financial stability. This means they need to adopt new tools and frameworks that are suitable for emerging technologies like AI, and invest in RegTech and SupTech to improve supervisory capabilities and decision-making. The European Central Bank's (ECB) 2024-2028 tech strategy is about investing in both people and technology to provide supervisors with the right tools and skills (training) and to upgrade its IT systems to meet future demands.
See: Balancing Fintech Innovation and Regulation
This is all part of the ECBs SSM Digitalisation Blueprint launched by the supervisory board in 2020 to (a) build innovative tools and systems, (b) develop a common IT landscape, (c) foster 'digital culture', (d) run an advanced 'innovation model' at the SSM, and (e) support innovation in the wider ecosystem of the private sector, academia and other authorities. It's the ECBs commitment to using advanced supervisory technology to streamline processes and modernize. Also, initiatives like the FUTURES Act in the U.S. are advocating for regular reviews of supervisory tools to ensure they are up to date, adaptable, and support effective oversight.
Another effective way to drive innovation is by creating spaces where it can thrive such as innovation offices and regulatory sandboxes where financial products and services can be safely tested before they are fully implemented. American is moving in this direction with the proposed Financial Services Innovation Act of 2024, which would establish specialized offices and sandboxes within federal financial regulators.
Accept failure as a valuable learning tool instead of viewing it negatively. The OECD clearly sees it better for regulators to see failure as a step towards success ('Learn to fail, not fail to learn'). A failed experiment can result in smarter policies in the long run, often preventing bigger mistakes in the future.
Collaboration is just as important. Regulators should work closely with financial institutions and other stakeholders to share insights and develop best practices. For example the UK Prudential Regulation Authority (PRA) recently held a pilot roundtable with banks, insurers, and other experts to explore how regulation can safely enable innovation.
Agile Regulator Scorecard
How well do you think your regulators would score? 10 point scale with 1 (lowest) and 10 (highest)
- Overcoming Cultural Barriers
- Balancing Innovation with Stability
- Setting up Innovation Offices and Sandboxes
- Investing in Regtech and Suptech
- Promoting Collaboration and Learning
- Allowing Failure
- Updating Internal Systems and Mindsets
Final Thoughts
To truly embrace innovation, regulatory leaders must set the tone by creating an environment where trying new things is encouraged and not feared. Regulators need the right tools and training to keep up with new technologies and changing markets.
See: Innovative Approaches to Smarter Regulation
Outdated systems won't cut it any longer. Regulators need to invest in a modern tech stack and build agile and skilled teams. Finally, collaboration and bold thinking are keys to unlocking growth. With the right approach, regulators can drive growth while balancing stability.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Canada Sues Google Over Anti-Competitive Ad Practices
Competition | Nov 28, 2024
AI Image
Canada's Competition Bureau Sues Google for Anti-Competitive Practices in Online Advertising
The US, UK, and EU are finally getting tougher on Google's search monopoly, and the Competition Bureau of Canada is now suing Google) too for anti-competitive behaviour that unfairly blocks competition and maintains control over core tools used by advertisers and publishers. The Bureau says Google's unfair practices costs advertisers and publishers which hinder the Canadian economy and restrict innovation.
What’s Google Being Accused Of?
The area of focus in this case is Google's advertising tech stack which is a series of tools that connects buyers and sellers of advertisements that Google controls to dominate the the sector. Google allegedly forces businesses to use its tools by making them work better with Google Search than any other competitor's tools.
See: DOJ Wants to Break Up Google’s Search Monopoly
They also prioritize its own products in ad space auctions, and restrict publishers from working freely with other platforms, limiting the competition while boosting their control. At the end of the day, anti-competitive practice forces advertisers to pay higher costs which are passed onto consumers who pay higher prices, hurting Canadian businesses and consumers.
What's Next?
The Bureau has taken the case to the Competition Tribunal and is asking them to force Google to sell parts of its advertising tech business to create a more open market. They also are asking Google to stop these anti-competitive practices and pay financial penalties to ensure compliance with Canadian competition laws. Google of course disagrees and plans to defend itself in court, saying there's a lot of competition in online advertising and that businesses have many options.
Outlook
This is a big case for Canada who has increased efforts to address monopolistic practices in the digital economy.
See: Competition Act Amendments and What It Means for Fintech
If the Competition Bureau, it will impact how Google operates its ad tech business in Canada hopefully lowering costs for advertisers while increasing revenue for publishers, and spur more innovation and competition in the market. Does this case smell similar to the Canadian banks and the need to strengthen competition in the financial sector?
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Governance Health Check Framework: How to Perform a Corporate Governance Review
November 29, 2024
Image: Freepik/master1305
Every organization should be carrying out a regular governance health check — but what should businesses focus on? Governance expert reveals their trusted health check framework.
Effective governance can never be a ‘set and forget’ endeavor — it needs to be continually monitored, reviewed, and modernized for the business to see its full benefits.
As Marc Hodak, Partner at Farient Advisors, said at Diligent’s user conference, “Good governance is ultimately what is right for the long-term health of the company.”
Diligent, a leader in modern governance, highlights the need for organizations to conduct regular health checks in order to maintain good governance, effectively manage risk, foster diversity and inclusion, and react to the needs of shareholders and the wider society.
In the same way you’d send your vehicle for a regular check-up to help to identify hidden issues so you can proactively address them and drive smoothly, regular governance health checks are also crucial. A deep governance check can uncover potential gaps or weaknesses in the governance structure, allowing businesses to quickly adapt to changing regulatory landscapes, emerging risks, and evolving business needs.
What steps do organizations need to take to complete a corporate governance health check? In the framework below, Diligent’s experts outline how to perform a governance health check to proactively respond to the evolving corporate landscape, empower sustainable growth, and uncover any hidden issues,
The fundamental principles of corporate governance
Good corporate governance considers the rules, practices and processes that guide an organization towards its goals through effective operations and clear decision-making.
Six key principles of corporate governance were issued by the G20 and the Organisation for Economic Co-operation and Development (OECD) in 2023. This guidance assists policymakers in evaluating and improving legal, regulatory, and institutional frameworks while also serving as a guide to help corporations innovate and adapt in a competitive world.
- A clear corporate governance framework. Just like a car requires a solid frame to remain effective over time, good corporate governance requires a strong foundation that supports efficient allocation of resources.
- The rights and equitable treatment of shareholders and key ownership functions. As the owners of a publicly traded corporation, shareholders must be allowed to participate and vote in general meetings, elect and remove members of the board, and approve or participate in fundamental corporate decisions.
- Institutional investors, stock markets, and other intermediaries. Considering those with an interest in the company is a foundational element of corporate governance; brokers, institutional investors, credit rating agencies, analysts, and proxy advisors all require oversight for fair and effective functioning.
- Transparency and disclosure. If a decision affects the material health of a publicly traded company, boards must make investors aware promptly. Corporate governance requires clear, transparent communication with all shareholders and stakeholders.
- The responsibilities of the board. It’s essential the board structure supports effective oversight and accountability so directors can exercise objective and independent judgment, oversee risk, and monitor managerial performance.
- Sustainability and resilience. To ensure a company can withstand change and thrive well into the future, sustainability frameworks, practices, policies, and incentives are integral elements of corporate governance that yield long-term success.
Diligent’s governance health check framework
- Keep up with the news and public opinion. News and public opinion are powerful yet often underutilized sources of information, with many organizations failing to recognize customer and stakeholder perceptions until it’s too late. Keeping abreast of industry news and public opinion helps you better understand public sentiment to ensure your actions don’t have a negative reaction.
- Pinpoint where your business stands. It’s important as part of your governance health to understand your risk and where you stand within your industry. Are you a leader in the field, or is there room for improvement? This data you gather will help you identify gaps and create SWOT analysis reports, which are the basis from which to generate risk and other corporate strategies.
See: UN’s Blueprint for AI Governance and Global Representation?
- Assess sustainability frameworks. Take climate change and the transition to net zero: do you understand the potential risks of moving from fossil-fueled operations to renewable energy sources? What are the risks of not doing so, like non-compliance with evolving regulations or a poor reputation among environmentally-minded future workers? Good corporate governance enables sound management of these risks.
- Review the diversity and inclusivity of your board. Effective governance’s “participatory” nature means boards and organizations must be equitable and diverse. Moreover, these diverse board members and employees need an active voice in corporate decision-making: does your board include and value the views of people with various skills, talents, abilities, experiences, and perspectives?
- Return to your organization’s strategic plan. A strategic plan ensures boards understand where the corporation is going and how it will get there. As part of a governance health check, it’s important to revisit your strategic plan to ensure the decisions you make about the future of the business align with the organization’s overall mission, vision, and values statements.
Once you’ve completed your governance health check, keep up with organizational changes and evolving stakeholder needs through real-time data dashboards for board and leadership collaboration.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Trump Media Files Trademark for Crypto Platform ‘TruthFi’
Crypto | Nov 27, 2024
Image: Freepik
Trump Media Group Trademarks 'TruthFi' for Crypto Payments Platform
Trump Media & Technology Group (TMTG) who owns Truth Social recently filed a trademark application to the U.S. Patent and Trademark Office (USPTO) for "TruthFi", a cryptocurrency payment platform on November 18, 2024.
Based on the trademark application filing, TruthFi will be a platform to facilitate cryptocurrency transactions, so digital asset services could involve a digital wallet, card payment processing, asset management, custody or trading. Details and launch date were not mentioned but the filing aligns with TMTGs announcement to expand into digital asset services.
Conflict of Interest?
As Trump broadens his interest and assets in the world of crypto, it raises questions about conflict of interest issues given that Trump has dual roles as President-elect AND the owner of businesses that could benefit from favourable regulations. Also, Trump has previously declined to divest from his business empire and has not suggested that he has plans to do so during his upcoming term.
See: Meme Coin Chaos and Wild West of Viral Tokens
Richard Painter, Ethics lawyer:
“It’s a huge problem but it’s not a Trump specific problem. Just like it’s a huge problem that members of Congress are trading crypto while they fail to pass legislation regulating crypto and accept huge amounts of donations from the crypto industry.
President Trump ought to do what every other president has done: Divest personal assets, Trump Organization assets, everything that creates a conflict of interest with his official duties. And that includes Truth Social and crypto.”
Broadening Crypto Involvement
- Trump's campaign promise was to make the U.S. the “crypto capital of the planet.”
- He also vowed to replace outgoing SEC Chairman Gary Gensler with a more crypto-friendly appointee.
- He's launched several Trump-related digital NFT collectibles (Mugshot Edition, Trump Cards)
- Reportedly, Trump is in discussions to purchase crypto trading platform Bakkt (news drove up stock price by 160%)
- In September, Trump launched World Liberty Financial, another crypto-focused business. (Justin Sun, Founder of Tron Blockchain, purchased $30 million of WLFI tokens)
- Trump's family also launched crypto platform the 'Defiant Ones
The Bigger Picture
Trump's new trademark and growing interest in cryptocurrency shows how closely his businesses are getting involved with the crypto world.
See: Gary Gensler Resigns as SEC Chair, Leaving January 20
As his administration takes office in the new year, the decisions it makes about crypto regulation will shape the future of the sector in the U.S. while also likely benefiting his own companies profit.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Gary Gensler Resigns as SEC Chair, Leaving January 20
Regulation | Nov 22, 2024
Image: Freepik
SEC Chair Gary Gensler to Step Down January 20, What It Means for Markets and Crypto
On Nov 21, 2024, the U.S. Securities and Exchange Commission (SEC) announced that Gary Gensler SEC Chair will officially step down on January 20, 2025, aligning with President-elect Donald Trump's inauguration.
During his tenure as SEC Chair, Gary Gensler oversaw the aftermath of the GameStop trading frenzy, lawsuits against crypto and fintech giants like Binance, Coinbase, Uniswap, and Robinhood, enforced regulations during the SPAC boom, addressed controversies over meme stocks and market volatility from social media fuelled trading, implemented reforms in response to the Archegos Capital collapse, managed the regulatory response to the FTX bankruptcy, and negotiated the first full inspections of China-related audit firms by the Public Company Accounting Oversight Board (PCAOB).
On January 20, 2025 I will be stepping down as @SECGov Chair.
A thread 🧵⬇️
— Gary Gensler (@GaryGensler) November 21, 2024
According to the SEC's release, Gensler's key achievements:
- Updated rules to central clearing including changes to how trades are processed and cleared.
- Tightened governance rules for insider trading, improved transparency in executive pay, and made it easier for shareholders to vote on board members.
- Introduced new transparency requirements for companies to share more information about cybersecurity threats, climate risks, and data breaches.
- Took strong action against major crypto firms including cases of fraud and failing to register properly.
See: Gary Gensler, Chairman of the SEC Speech
What It Means for Crypto
Gensler's resignation could lead to major changes in how crypto and digital assets are regulated in the U.S. With Gensler's departure and Trump's pro-business/crypto approach, many industry experts are expecting crypto rules to become more transparent and relaxed. While Bitcoin has been on a torrid upward trajectory since the start of the year, news of Gensler's exit has pushed Bitcoin to the doorstop of $100,000 USD, it's most psychological barrier to date. So who will the next SEC Chair be and what will their approach be towards crypto?
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
