Binary Options Still Threatens EU, Crypto-Lawsuits Mount: Best of the Week

Catch up on last week's top stories.

First the crypto dollar, then the crypto euro, now the crypto pound

The UK is about to see its first stablecoin, as cryptocurrency exchange platform London Block Exchange announced its first cryptocurrency last week. LBXPeg will be pegged to the value of the pound sterling, and backed by pounds held by the company in a segregated account.

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The Canary Wharf-based firm is licensed by the Financial Conduct Authority, the UK’s financial regulator.

Ayondo signs deal with Singapore investment firm

Ayondo, a purveyor of white-label software for brokerages, signed a deal with Huanying International, an investment firm which is listed on the Singapore stock exchange.

Ayondo, which claims 210,000 users over 195 countries on its social trading platform, offers a ready-made brokerage business that clients can re-brand as their own. Under the terms of the new partnership, clients of Huanying International will be able to make use of this service.

What is…Bitcoin?

Searches for the word ‘Bitcoin’ on the Google search engine have declined by 60 percent since the beginning of 2018. Taken in conjunction with the lower price and the fact that people are buying fewer related products, this could be seen as a sign of decline for the cryptocurrency.

However it can also be argued that this is actually a good sign; Bitcoin has become stable, and accordingly, it is attracted fewer of the get rich-quick-types. These were the people that registered all the Google searches and drove the price up to unsustainable levels.

ESMA changes financial technicalities

ESMA, the EU’s financial authority, cancelled some requirements regarding automated trading, which had been put in place in 2011. This was part of the regulatory shakeup caused by MiFID II, the authority’s big update of financial law, in January 2018.

Specifically, it canceled guidelines related to organisational requirements in automated trading environments. In addition to this, the watchdog updated its Q&A section to cover a couple of technicalities of implementing new restrictions.

Exclusive: CySEC extends deadline

Financial firms under the jurisdiction of the Cyprus Securities and Exchange Commission, the financial regulator of Cyprus, had had until the 14th of September to comply with some new regulations. However, too many proved unprepared as the date rolled by, so now the watchdog is actively working to ensure that brokerages in its jurisdiction are licensed, well capitalised, and have negative balance protection.

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Negative balance protection means that customers cannot owe money to the brokerage. Previously, it was possible for people to get unto debt with these firms. CySEC ordered them to either upgrade to a market-making licence or transfer the balance protection to a better-funded partner.

Repercussions of Google advertising

Early in 2018 all of the major internet platforms – most notably Facebook and Google – decided to ban cryptocurrency-related advertising. The reason given was that there was too much potential for users being defrauded by scams. This was a massive blow to an industry that exists almost entirely on the internet.

However, the websites reneged on their ban a few months later. Google announced this in September. Given that regulations have not become much clearer, what changed?

It seems that the efforts made by the two American financial regulators (the SEC and CFTC) to crack down on fraudsters reassured the internet giant to the extent that it decided to allow authorised entities to advertise on its platform once again.

Ibinex cryptocurrency report

Ibinex, which sells the software necessary to open and run a cryptocurrency exchange, released a yearly report of the global state of the cryptocurrency industry.

The project looks at the basics of cryptocurrency and what makes it popular, which tokens to look out for, users demographics, and a looks at cryptocurrency regulation continent by continent and country by country.

Binary options fraudsters still busy in Europe

In the financial world, binary options and fraud are synonymous, and the betting service has been banned in the EU since July 20187. This has not deterred scammers however, who have been diligently finding ways to operate anyway. Case in point – on Thursday, CySEC of Cyprus issued a warning about two firms (Binatex and 24Traderush) that are lying about it licensing them.

With call centres located in all kinds of places, and clever advertising campaigns, these companies continue to prey on the unsuspecting and the inexperienced. In this article, Finance Magnates looks at a couple of examples of their work.

Analysis: legitimacy via lawsuits?

It was recently revealed that the number of blockchain-related lawsuits in 2018 has already far surpassed that of the whole of 2017. From securities-related disputes to cases of outright fraud, at least 45 different filings have been made in the US alone this year.

Regulatory uncertainty means that the line between legal and civil cases is blurred. In this piece, Finance Magnates looks at this subject in detail. Could these legal disputes help cement the legal position of cryptocurrency?

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