Crypto
This Week in Web3: Unlocking Blockchain’s Potential Within Payment Ecosystems | PYMNTS.com
Blockchain is growing into a global innovation that transcends its initial association with crypto.
The auction house Christie’s, for example, recently announced that an upcoming collection of fine art photography will include blockchain-based certificates of ownership for digital provenance purposes.
And from banking to payments and beyond, blockchain technology is being adopted in mainstream industries, with a global appeal that stems from its ability to transcend borders and facilitate decentralized, transparent and efficient processes while offering benefits like programmable capabilities.
But this growth hasn’t been without challenges. One of the obstacles to blockchain’s broader acceptance is the fragmented regulations across regions. As regulations evolve and blockchain matures, companies will need to stay ahead of the curve to harness the potential of this technology.
PYMNTS each week tracks the trends and themes of Web3’s journey to greater adoption and utility across payments and commerce.
Read more: Stablecoins, Tokenization and Caroline Ellison Headline This Week in Web3
Navigating Regulatory Hurdles
News broke recently that Dubai’s cryptocurrency regulator wants companies to warn customers of the risks of digital currencies. The regulator, the Virtual Assets Regulatory Authority, updated its guidelines and will require companies that want to market crypto in the United Arab Emirates to include a new and “prominent” disclaimer starting Tuesday (Oct.1).
Sometimes regulatory clarity in one jurisdiction can make up for challenges in others. For example, Robinhood is offering cryptocurrency transfers to European customers amid regulatory pressure in the United States. The service, “one of the most requested features in the region,” allows customers to deposit and withdraw more than 20 cryptocurrencies, including bitcoin, ethereum and USD Coin, according to a Tuesday (Oct. 1) announcement.
Tuesday’s announcement follows a report from last week about a possible collaboration between Robinhood and U.K. FinTech Revolut to issue stablecoins. Both companies declined to confirm the report.
Stablecoins, which are digital assets pegged to the value of traditional currencies, have become a focal point in the cryptocurrency and financial sectors due to their relative stability compared to volatile assets like bitcoin.
Read more: Can Stablecoins Spark Crypto Adoption Across Retail and B2B Markets?
Blockchain’s Expanding Role
Blockchain technology was once synonymous with cryptocurrency but is now expanding into mainstream industries, according to the PYMNTS Intelligence, Solana and Solana Foundation collaboration, “Blockchain’s Benefits for Regulated Industries.”
The technology’s decentralized ledger offers promising applications in banking, payments, and programmable finance. One recent example comes from First Abu Dhabi Bank (FAB) which Sept. 24 successfully completed a pilot using programmable payments with JPM Coin through Onyx by J.P. Morgan.
“This successful pilot opens up the possibility of a dynamic and automated funding and settlement solution to FAB and J.P. Morgan’s mutual clients,” the companies announced. “This solution will enable clients to benefit from Onyx’s real-time and/or event-based programmable capabilities.”
And elsewhere, Worldpay is reportedly in talks with blockchains about becoming a validator and verifying blockchain transactions. The payments provider aims to do so to better understand how digital ledgers operate and to be involved with blockchain infrastructure.
Read more: Are Blockchain-Based Smart Contracts a Smart Option for Global Financing?
“The idea is to be part of the ecosystem right at the base,” said Sanchit Mall, Worldpay’s Web3 and crypto lead in the Asia-Pacific region. Worldpay has processed $1.3 billion worth of payments using stablecoin so far this year, up from less than $1 billion in 2023, according to the report.
Worldpay’s exploration of blockchain validation underscores a critical point: The payments industry is seeking to harness blockchain’s capabilities. While cryptocurrency adoption remains uneven across the globe, industry leaders are preparing for a potential shift toward blockchain-based solutions that could eventually underpin financial ecosystems.
As another data point, PayPal Holdings now enables U.S. merchants — except those in New York State — to buy, hold and sell cryptocurrency directly from their PayPal business accounts. The company also now enables PayPal business account holders to send and receive supported cryptocurrency tokens to and from external blockchain accounts, PayPal Holdings said in an announcement Sept. 25.
Meanwhile, consumer behavior is also shifting in favor of digital currencies. Tech-driven consumers — the 15% of consumers who are usually the first to buy the latest connected device — are often habitual cryptocurrency users, according to the PYMNTS Intelligence report “Shopping With Cryptocurrency: Tech-Driven Consumers Drive Market Acceptance.” The study showed that 24% of these consumers use cryptocurrency at least 10 to 20 times per month.
This tech-driven cohort is likely to be a crucial demographic for businesses seeking to integrate blockchain and cryptocurrency solutions. As these early adopters embrace the convenience and efficiency of blockchain, they pave the way for broader market acceptance, forcing companies to rethink their strategies in the digital economy.
Crypto
Judge Issues Arrest Warrant for Quebec Cryptocurrency Business Owner in FACTOR Canada Cybertheft Case
There has been a major development in the FACTOR Canada cybertheft case.
The Ontario Superior Court of Justice has issued an arrest warrant for Quebec man James Campagna, found in contempt of court after nearly $10 million in music grant funds went missing.
In July 2024, it was reported that $9.8 million was allegedly stolen from the Canadian music non-profit and granting body’s Scotiabank account. In court last Friday (Jan. 9), where Billboard Canada was present, Justice W.D. Black of the Ontario Superior Court of Justice ruled that he will endorse a warrant for business owner James Campagna, sentencing him to 30 days in jail.
“I find that Mr. Campagna is a liar, a fraud, and a scofflaw, deliberately and knowingly breaching this court’s orders,” wrote Justice Black in a bombshell Commercial List endorsement dated Jan. 9.
According to court documents, Campagna is the sole shareholder of Vipera, a Quebec-based tech company. The document claims that money was transferred in the form of a counterfeit invoice from FACTOR to Vipera’s Scotiabank account by Campagna, who moved the money into an account owned by cryptocurrency platform VirgoCX Direct.
The funds were transferred out mere days after the Department of Canadian Heritage deposited $14.3-million to distribute to the music industry.
After the case became public, FACTOR released a public statement, claiming that Campagna gained access to the bank account from an IP address that had never previously accessed their banking info. Additionally, the organization noted that it was never flagged about the “highly unusual, suspicious, and illegal activity” by Scotiabank.
The case is one of — if not the biggest — theft cases in the history of the Canadian music industry. Nearly two years into the legal battle, FACTOR’s lawyers have consistently requested that Campagna be held in contempt of court — now it’s finally happening, a rarity in the Commercial List court.
In Friday’s filing, Justice Black writes that “Mr. Campagna has knowingly and intentionally disregarded and/or failed to comply with various orders of this court” including producing documents, correspondence, corporate financial statements and banking information.” Justice Black writes that Campagna has made various excuses to avoid participating, in what he calls “a frustrating ‘the dog ate my homework’ approach to his obligations.”
“Mr. Campagna has lied about various aspects of his conduct and activities in relation to the fraudulent transfer,” he writes. “It is highly likely that he was a knowing and active participant in the fraud, and that he has benefitted and continues to benefit from the proceeds of that fraud.”
According to “FACTOR’s investigations and surveillance,” Campagna has now “fled jurisdiction,” Justice Black reports, and moved to Qatar. That’s according to evidence including social media posts indicating he plans to “stay and work in Qatar for a year” and documents that show his four children have been enrolled in school in the country.
In his endorsement, Justice Black recognizes that Campagna “has taken active steps with a view to putting himself beyond the reach of the court.” Still, “there should therefore be plenty of time, once my order comes to his attention, within which Mr. Campagna can take steps to purge his contempt.”
In a statement to Billboard Canada, FACTOR Canada CEO Meg Symsyk says the ruling is an important development as the organization pursues the repayment of the missing money.
“FACTOR welcomed Justice Black’s ruling this past Friday, which reaffirms what we maintained since the outset: the perpetrators of this theft have not been held to account,’ she says. “The finding of contempt against Mr. James Campagna clearly illustrates the challenges that FACTOR has encountered in working to recover the stolen funds. FACTOR will continue to pursue all available legal avenues to recover these public monies and clear the organization and its staff.”
Scotiabank tells Billboard Canada that they cannot comment, given that the matter is before the courts.
As the legal proceedings continue, the question of penalty and remedy remains open-ended. FACTOR has made its stance clear, as they hope to recoup the almost $10 million in lost funds. In addition to seeking contempt from Campagna, the non-profit is putting legal pressure on Scotiabank, which they said in 2024 has “participated reluctantly, and in the most limited fashion” during the initial investigations.
FACTOR has said that Scotiabank “has acknowledged it has never reported this financial crime to law enforcement” and that despite an issued money transfer of $9,772,875.33, over 300 times larger than any previously made from the account, there were “no alerts to FACTOR of this highly unusual, suspicious, and illegal activity.”
FACTOR is one of the country’s most significant investors in the development, financing and support of Canadian music. Many in the music industry have been watching this case carefully.
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