Bitcoin Legal Precedent in China, FX Wages Rising – Best of the Week

Catch up on last week's top stories.

Swiss blockchain company buys UK company, UK licence

Trade.io, a Swiss company that aims to be a blockchain-style financial institution, has purchased a foreign exchange company. This is significant because the latter has a licence to operate in the UK.

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The name of the purchased party is Primus Capital Markets UK, although Trade.io has changed its name to TIO Markets. Interestingly, the CEO of the TIO Markets also a board member at Trade.io.

Social trading broker releases Gibraltar wallet

eToro, the Israeli trading firm that is working on receiving a cryptocurrency licence in Gibraltar, released its own cryptocurrency wallet. This product is being sold via its branch in Gibraltar, which is called eToroX. The wallet itself does not have a special name.

It will initially support Bitcoin, Ethereum, Litecoin and Bitcoin Cash, and will only be available to customers with at least $25,000 tied up in the company. eToro says that it will extend the service to other demographics in due course.

Cobinhood, Cobinhood..

Cobinhood is a cryptocurrency exchange from Tapei. It made ‎‎45,000 ETH in its own ICO, which was held at the beginning of 2018.

Finance Magnates spoke to the company’s COO, Wei-Ning Huang, about how he thinks the venture has gone so far.

Huang explained why the exchange was named after a Nottingham-based mugger, how it tries to cater to both beginning investors and institutions, how many users the company has collected, how it has avoided being hacked thus far. He also revealed some plans for 2019.

Prime broker now does foreign exchange

Linear Investments, a “a prime broker and hedge fund incubator, based in London and Hamburg”, signed a deal with Integral, another finance company, as well as with Barclays Bank. With these deals it wants to open a new venture called Integral BankFX.

This service will offer foreign exchange trading, the CEO explains to Finance Magnates in this interview, and it took 12 months to develop.

Bitcoin is protected by Chinese law

An interesting court case in southern China created a dangerous legal precedent – that cryptocurrency has economic value, and is thus protected by law.

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The case involved four companies. One of these tried to cheat the others out of some cryptocurrency, by claiming that the original contract between them was invalid because cryptocurrency is not recognised as legal tender in China.

The judge was unimpressed, ruling that cryptocurrency is obviously worth something, or the deal would not have been done, and that the company in question should be ashamed of itself. Interestingly, although the guilty part was ordered to pay, no interest was accrued because Bitcoin is property, and not currency.

Eight times more risky

The Financial Market Supervisory Authority, the financial watchdog of Switzerland, told local banks that they should assign an 800 percent risk weight to cryptocurrency. This means that they should have enough money to cover losses at least eight times over.

This is not an order, but a piece of advice sent in a confidential letter sent to an accounting organisation. It was obtained by a local news source ad published. It is possible to understand from this information that FINMA considers cryptocurrency to be highly volatile.

Foreign exchange pays

Stricter laws governing foreign exchange mean that it is more difficult to make money. One of the results of this is that employees are being paid more, because they must be of higher quality. For example, where once any pushy salesman would be hired, now one must have a law degree, because the authorities are watching.

In this analysis, Finance Magnates asks people from the industry what it’s like the be in a world of rising wages – up to 50 percent in some cases – and if it is sustainable. Some believe that we will soon see a drop in salaries – but how? Read here and find out.

Over-the-counter Bitcoin

What drives the Bitcoin market? Is it technological developments? Investor hysteria? Regulation?

Or is it what is known as over-the-counter trading – that is, trading that takes places away from an exchange, via a broker or directly between two traders.

Some people believe that more is transacted in this way than is on the exchanges – indeed, Bitcoin whales prefer this method. What advantage does this route have for a trader? What disadvantages? Why are these transactions often invisible on charts?

In this analysis, Finance Magnates talks to a range of people in the industry, trying to understand this hidden market force.

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