M. Imtiaz Karamat is an IP Osgoode Alumnus and Associate Lawyer at Deeth Williams Wall LLP. This article was originally posted onÌę on November 30, 2022.

On November 16, 2022, the Office of the Superintendent of Financial Institutions (OSFI), the Financial Consumer Agency of Canada (FCAC), and the Canada Deposit Insurance Corporation (CDIC) (collectively, the Federal Agencies) released aÌęÌę(the Statement) addressed to federally regulated entities involved in crypto-asset activities or crypto-related services. ÌęThe Statement reinforces the Federal Agencies’ expectations that regulated entities should adhere to applicable regulatory requirements and guidance when engaging in the crypto space.

The Statement set out how the Federal Agencies are monitoring the management of risks associated with crypto-asset activities by entities. ÌęThe Federal Agencies believe that such risks should be clearly understood and addressed for any planned activity, and direct regulated entities to ensure that any crypto-asset activity complies with existing federal financial laws and issued regulations or guidance. ÌęIn accordance with this position, the Statement describes the key competencies and guidance of each of the Federal Agencies as they relate to the subject matter:

• Prudential Regulation.ÌęWhen dealing in the crypto space, regulated entities should consult with OSFI’s Digital Innovation Roadmap and recently published advisory on crypto-asset exposures, entitledÌę.
• Consumer Protection.ÌęFCAC expects regulated entities to notify them when developing or offering crypto-assets and provide any further information requested by FCAC. ÌęThis notification allows FCAC to assess the applicability of market conduct obligations as outlined in relevant legislation and associated regulations. A definition of “crypto-assets” is included in the Statement for further guidance.
• Deposit Insurance.ÌęCrypto-assets are not eligible for deposit insurance under the currentÌęCDIC Act. ÌęWith this in mind, CDIC expects its member institutions to prioritize transparency when disclosing information on deposit insurance protection to consumers as such information is critical for them to make informed financial decisions. ÌęThis aligns with theÌę, which requires CDIC members to take steps to ensure that themselves and their business partners do not provide misleading or deceptive information regarding deposit insurance protection.

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Natalie Bravo is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

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Do you ever get weird emails that are poorly-veiled attempts? Strange requests for payments? These phishing attempts are occurring more frequently, but they are just the tip of the ransomware iceberg. Cybersecurity breaches are a serious concern and the ever-evolving technological landscape is an endless playing field for dedicated malicious actors. Widespread breaches exemplify the need to updated software and security policies across all sectors which use online services. With the pandemic and many working from home, these attacks are on the rise. The Canadian Centre for Cybersecurity reported that ransomware is an and

Many Canadians have not heard of , a malicious software (“”) that attacks computers by user files so that malicious actors can request monetary ransom to decrypt or unlock the files. These are typically, though not always, carried out by an unauthorized or unknown transfer of a Users may download and/or open a file that appears legitimate and unknowingly infect the operating system with malware. Accompanying ransom demands are usually requested in the form of Bitcoin due to the presumed anonymity of the transactions. The use of Bitcoin is rampant in these types of attacks – so much so that they have impacted (“KłÛ°ä”) . Sometimes hackers . In a recent report, McCarthy TĂ©trault’s Cyber/Data Group estimated that Canadian organizations . Ransomware attacks damaging more than finances as they can disrupt operations and corrupt or destroy sensitive data. During the pandemic, hospitals are of utmost concern. The click of an ad, a visit to a website, or a simple file download could risk your data.

In 2017, a high-profile ransomware attack named devastated various organizations worldwide. The automatically spread throughout networkers and did not require users to open or download any files. It encrypted user files and demanded Bitcoin ransom payments to decrypt them. WannaCry targeted “end of life” or outdated versions of and exploited certain vulnerabilities within the software. Operating systems must frequently be updated to implement security patches that prevent such exploits. However, updates for older computers are usually discontinued as technology progresses. Microsoft quickly released further following the mass attack. The international event was and reported to have impacted more than 200,000 computer systems and caused an estimated hundreds of millions to billions of dollars in damage. The WannaCry attack affected organizations such as factories, telecommunication companies, hospitals, governments, and delivery systems. Years later, Ìę

WannaCry was terrifying when it happened, but many more concerning high-profile cybersecurity attacks have occurred Ìęwithin the past year . Just imagine . Some alarming events in the past three months include the following:

• In May 2021, the largest petroleum pipeline in the United States, Colonial Pipeline is reported to have been hacked via a . The password had access to the company’s internal network and was also unfortunately leaked on the dark web. The hackers utilized the credential to attack and extort Colonial Pipeline. The systems started to shut down and the ransom demanded was $4.4 million in payment. The company stated they had no choice but to
• In June 2021, one of the largest meat producers in the US, JBS made the difficult decision to pay the $11 million USD ransom in Bitcoin to resume plant operations.
• On July 4^th, 2021, the ‘,’ allegedly conducted by Russian-associated hackers REvil, hit during the US holiday weekend. Kaseya, a software firm, was targeted in the . Supply-chain attacks, in brief terms, involve compromising a trusted supplier therefore sabotaging the distribution system. The Kaseya attack largely affected US businesses, but Canada was also impacted. Between 800 and 1,500 organizations across the globe were impacted and essentially paralyzed. They demanded from affected users/companies and expressed some willingness to .

It is difficult to know what will happen next with technology, computers, and software. It is best to be proactive and cautious. I have compiled some tips, supported by and the , to help keep your data and your employer’s networks safe:

• Check your computer(s) for updates frequently, and make sure your operating system is still receiving new updates.
• Back up your data periodically and preferably offline. If you are targeted and your data becomes inaccessible, you will feel so much better knowing you had a back-up or two handy.
• Make sure you are running a trusted anti-virus program, sometimes they are installed on your computer.
• Understand how to your data in the event of a breach and practice the recovery methods.
• Keep your passwords safe and unique - reusing passwords is never a good idea.
• Familiarize yourself with common types and methods of malware. You can find a handy list .
• Contact your organization’s IT department whenever you see anything suspicious, just in case.

Stay safe, don’t interact with strange emails, and always update and backup if possible! Feel free to comment below any tips or advice you may have.

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The best way to start is by Bitcoin and explaining a few key definitions (underlined below).

Bitcoin is online money. But it’s special. Dollars are sometimes said to be backed up by gold, which means that we all agree that you can exchange the piece of paper for a certain amount of gold. (Note: this “gold standard” is a monetary system that was replaced by “fiat money” and only serves as a metaphor). Bitcoins are decentralized, which means it’s outside of the agreement that pieces of paper (or cheques or e-Transfers) have value and banks aren’t relied on to keep records of the balance in our checking accounts. This also means that there are no physical pieces of paper, rather, this system uses a blockchain. But how do I transfer currency to you without the pieces of paper?  One solution can be that we can all keep track of it. But if we all keep track of it, doesn’t that mean that anybody can change it? The honour system is good, but trust issues are greater. Blockchain solves this issue with a math problem (a ).

understands a blockchain as something “you can add data to and not change previous data within it” using a “mechanism for creating consensus between scattered parties.” They “do not need to trust each other but only trust the mechanism by which their consensus as arrived at.” The basic idea is that without the pieces of paper as money, there needs to be some other way of keeping track of how the money is moving. The solution is that you announce the transactions to everyone. All the transactions (me transferring to you, you transferring to a stranger, etc.) are clumped together in a “block” to add to the “chain” of other blocks. To add to the chain, “miners” have to solve the cryptographic puzzle, which takes a lot of computer power. If they arrive at the right solution, they can tell everyone that they have the right answer and everyone can verify it. Solving the problem is hard, but once a solution is announced, it can be easily verified. A new “block” is then added to the “chain” and everybody starts using the new blockchain. For their trouble, the solver gets some bitcoins.

As a form of currency, Bitcoin has to be limited in some way, or else it would be worthless. Thus, halving exists to limit the supply of Bitcoins entering circulation. Halving refers to the number of Bitcoins a miner receives being cut by half. This stops inflation from decreasing the purchasing power of Bitcoins. Prior to May 2020, miners received 12.5 Bitcoins, but after halving, they will only receive 6.25 Bitcoins. is programmed to occur every 210,000 blocks, and since a new block of transactions is completed roughly every 10 minutes, halving occurs roughly every four years. Fewer new Bitcoins means that the supply of Bitcoins will become even more scarce, which might have some interesting implications.

As I write this, two weeks after the 2020 halving, Bitcoin is down Historically, it often spikes in price for the next year or two, but it’s not clear if the halving is the cause. We should be careful of correlations and hasty speculations. Word already spread about the Bitcoin gold rush. Inexperienced investors have joined the party and changed the market. What are some things that might affect Bitcoin prices? A safe bet would be a new law affecting Bitcoins. Alternatively, a major economic event, like the current worldwide pandemic, also has the potential to impact Bitcoin prices.  

If you are thinking about investing Bitcoins, do your own research and understand the risks. Be cautious of predatory that take advantage of amateurs. For my fellow Canadians, take a look at the . Interestingly, Canadian banks aren’t so thrilled about cryptocurrency. For instance, does not allow the use of its credit card for the purchase of cryptocurrency  

What kind of world will we be in at the next halving? Like the price of Bitcoin, your guess is as good as mine. See you in four years.

Written by Dan Choi, a second year JD Candidate at Osgoode Hall Law School and an IPilogue Contributing Editor.

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