Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Web3, Decentralization, DAOs
U.S. SEC Files Lawsuit Against Tron Founder Justin Sun
Coindesk | Nikhilesh De | Mar 22, 2023
Image: Justin Sun - video screenshot, YouTube, Tron
The regulator alleged TRX and BTT are unregistered securities, and claimed Sun created an "extensive wash trading" program to boost their trading volume.
- The SEC said in a press release it was suing Sun, the Tron Foundation, the BitTorrent Foundation and BitTorrent (now known as Rainberry) over the sale of tronix (TRX) and bitTorrent (BTT) tokens, which the regulator described as unregistered crypto asset securities. The regulator further alleged the defendants "fraudulently manipulat[ed]" TRX's secondary market through an "extensive wash trading" scheme.
See: SEC Warns Investors: Be Vigilant Regarding Crypto Asset Securities
- The SEC alleged, by having his own employees "engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled." According to the court filing, Sun's Tron Foundation employees conducted the trades, the BitTorrent and Tron foundations controlled the accounts and Rainberry employees transferred funds for the trading.
- Celebrity influencers: The agency is also suing Lindsay Lohan, Jake Paul, Soulja Boy, Lil Yachty, Ne-Yo, Akon and Michele Mason on illegal touting charges for their roles allegedly promoting TRX and BTT without disclosing they were paid to do so. The majority of these celebrities settled the charges.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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SEC Warns Investors: Be Vigilant Regarding Crypto Asset Securities
SEC | Release | March 23, 2024
Image: Unsplash/Maxim Hopman
The SEC’s Office of Investor Education and Advocacy continues to urge investors to be cautious if considering an investment involving crypto asset securities.
- Risk notice to investors: Investments in crypto asset securities can be exceptionally volatile and speculative, and the platforms where investors buy, sell, borrow, or lend these securities may lack important protections for investors. The risk of loss for individual investors who participate in transactions involving crypto assets, including crypto asset securities, remains significant. The only money you should put at risk with any speculative investment is money you can afford to lose entirely.
- Those offering crypto asset investments or services may not be complying with applicable law, including federal securities laws. Under the federal securities laws, a company may not offer or sell securities unless the offering is registered with the SEC or an exemption to registration is available. Similarly, the law requires parties such as securities broker-dealers, investment advisers, alternative trading systems (ATS), and exchanges to register with the SEC, a state regulator, and/or a self-regulatory organization (SRO), such as FINRA. Moreover, entities and platforms involved in lending or staking crypto assets may be subject to the federal securities laws
See: Should the SEC Be Allowed to Wage an Unsupervised Dirty War on Crypto?
- Investments in crypto asset securities can be exceptionally risky, and are often volatile.
- Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams, often leading to devastating losses.
- Having an investing plan, as well as understanding your risk tolerance and time horizon, can be critical to your investing success.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Coinbase Issued Wells Notice by SEC
Reuters | March 22, 2023
The U.S. Securities and Exchange Commission (SEC) has threatened to sue Coinbase Global Inc over some of the crypto exchange's products, turning up the heat on the largely unregulated sector.
- The potential enforcement actions would be tied to aspects of Coinbase's spot market as well as its Earn, Prime and Wallet products, the company said.
- Shares of Coinbase dropped nearly 13% to $67.33 in extended trading after the company said on Wednesday that the regulator had issued it a Wells notice - a formal declaration that SEC staff intend to recommend an enforcement action.
- Coinbase said its services continued to operate as usual after the notice was issued.
See: Coinbase Begins ‘Wallet as a Service’ Enabling Companies to Integrate Into Their Own Apps
- A Wells notice does not always result in charges or signal that the recipient has violated any law. A Wells notice is typically one of the final steps before the SEC formally issues charges. It generally lays out the framework of the regulatory argument and offers the potentially accused an opportunity to rebut the SEC’s claims.
Coinbase Chief Legal Officer Paul Grewal said in a blog post:
Although we don’t take this development lightly, we are very confident in the way we run our business – the same business we presented to the SEC in order for us to become a public company in 2021.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Sushi DAO Head Chef Served With SEC Subpoena
CoinDesk | Nikhilesh De, Oliver Knight | March 22, 2023
Sushi DAO and Head Chef Jared Grey were served with a subpoena by the U.S. Securities and Exchange Commission, the decentralized autonomous organization revealed Tuesday.
- Grey proposed creating a "Sushi DAO Legal Defense Fund" in a forum post, saying it would "cover legal costs for core contributors." The proposal recommends making $3 million in tether (USDT) available for core contributors, with another $1 million worth of USDT available in case the initial $3 million are used up.
- The sushi token dropped 5.5% on the news.
- One of the initial comments on the forum post asked how the DAO known as Sushi was subpoenaed, with the user saying they did not receive it despite being a member of the DAO.
- "We’re cooperating with the SEC. We do not intend to comment publicly on ongoing investigations or other legal matters," the forum post said.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Coinbase Begins ‘Wallet as a Service’ Enabling Companies to Integrate Into Their Own Apps
CoinDesk | Bradley Keoun | Mar 8, 2023
Image: Unsplash/Mariia Shalabaieva
Coinbase, the big U.S. crypto exchange, is starting a “wallet as a service” business that will allow companies to customize blockchain wallets for their own customers.
- The U.S. crypto exchange says the new service could help companies “to help bring the next hundred million customers into Web3 through a seamless wallet-onboarding experience.” The service could be used by gaming apps where tokens or non-fungible tokens (NFT) are part of the game, or by companies that might want to incorporate a wallet into an app and make that “almost invisible to the end user.
- Coinbase says its wallet-as-a-service could help companies “to help bring the next hundred million customers into Web3 through a seamless wallet-onboarding experience,” according to a press release.
- The use of complicated 24-word recovery phrases is avoided through the use of “multi-party computation” cryptographic technology.
See: Federal Judge Dismisses Unregistered Securities Class Action Suit Against Coinbase (Shares Jump 21%)
Patrick McGregor, Coinbase’s head of product for Web3 developer platforms:
We view this as being the central enabling technology and revenue source for our developer strategy
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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CATO: Response to Request for Information on Digital Assets R&D
Cato Institute | Jack Solowey | Mar 3, 2023
Image: Unsplash/Fabio
Cryptographically secure software—including private cryptocurrencies and the distributed ledgers that enable them—can not only be tools for enhanced financial infrastructure, but also for furthering democratic civil society.
- My name is Jack Solowey, and I am a financial technology policy analyst at the Cato Institute’s Center for Monetary and Financial Alternatives. I appreciate the opportunity to comment on the Office of Science and Technology Policy’s (OSTP’s) Request for Information regarding Digital Assets Research and Development (RFI).
See: Should the SEC Be Allowed to Wage an Unsupervised Dirty War on Crypto?
- The Cato Institute is a public policy research organization dedicated to the principles of individual liberty, limited government, free markets, and peace, and the Center for Monetary and Financial Alternatives focuses on identifying, studying, and promoting alternatives to centralized, bureaucratic, and discretionary financial regulatory systems. The opinions I express here are my own.
- The RFI posed several important questions regarding the research and development of digital assets to further responsible innovation in line with American values. This letter specifically addresses topics 1, 2, and 4.
Download the 9 page PDF public comment --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Should the SEC Be Allowed to Wage an Unsupervised Dirty War on Crypto?
Cato Institute | Jack Solowey and Jennifer J. Schulp | Mar 6, 2023
Image: Cigar Emperor Ltd
Congress must both defend its oversight authority and give American crypto developers, entrepreneurs and users a clear path to lawfully carry on their business. Providing a common‐sense disclosure framework for asset‐backed stablecoins is the place to start.
- On Feb. 9, the SEC settled allegations that Kraken’s “staking‐as‐a‐service” program constituted the illegal sale of unregistered securities. Then the SEC sent a Wells notice to stablecoin issuer Paxos, indicating a potential future enforcement action over its Binance USD token (a Binance‐branded asset designed to keep a 1:1 peg with the U.S. dollar), which the commission apparently also alleges is an unregistered security.
- And Gensler indicated in a recent interview that basically every crypto project — “everything other than Bitcoin” — could have an SEC target on its back.
- The SEC maintains it is merely enforcing existing registration and disclosure requirements on crypto tokens and services it considers securities. But this is misleading for two reasons.
- One, the applicability of securities laws to the projects at issue — Kraken’s staking service and Paxos’s BUSD stablecoin — is, at the very least, contestable. Even more so if the idea is that every crypto token other than Bitcoin is to be considered a security.
- Two, a regulator interested in getting consumers the best disclosures about new products, including stablecoins, would provide clear guidance on how to do so. The SEC hasn’t.
- Gensler’s comments also could imply that he views even highly decentralized tokens, like Ether, as securities. This is inconsistent with previous comments by SEC officials, as well as the idea that securities laws are to address managerial risks — hallmarks of centralized bodies, not decentralized software protocols.
See: Gary Gensler, Chairman of the SEC Speech
- Lawmakers have a vital role in restoring administrative accountability.
- In a Feb. 14 Senate Banking Committee hearing, Republican Senator Tim Scott told the hearing, “If Chairman Gensler is going to take enforcement action, Congress needs to hear from him very soon.” Across the aisle, Democratic Senator Kirsten Gillibrand has voiced similar sentiment: “I have many concerns about Chairman Gensler and his approach to this space.”
- Oversight would be most welcome. Congress should go a step further by legislating, first providing a practical registration path for stablecoins.
- The SEC shouldn’t be left in the shadows to try to snuff out Americans’ work on and access to a new class of technology. As House Financial Services Committee Chairman Patrick McHenry has recognized, the future of digital assets “is a major political and economic question that must be decided by Congress.”
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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