Bitcoin Fork, Japan Leverage Cap and Global Brokerage Bankruptcy: Best of the Week

Catch up on last week's top stories.

Leverate gets MT5

On Monday we reported that technology provider Leverate has begun offering the MT5 plaform to its institutional clients. 

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Leverate’s Knowledge Manager, Daniel Alkaly, said: “This partnership effectively makes Leverate open for business on MT5. Should our clients want to provide their traders with the MT5 platform, but with all the added benefits available at Leverate, we can now support that need.”

Japanese leverage woes

In a move making Japanese forex brokers worried, the Financial Services Agency is considering further limiting retail forex leverage in the country. The move could negatively affect yen crosses.

The regulator cut leverage to 1:25 in 2008 following the financial crisis. This is already one of the world’s lowest rates of leverage.

The new rules are said to be considered for implementation from the middle of 2018. The government’s proposal risks pushing Japanese forex investors, commonly referred to as Mrs. Watanabe, to seek alternatives outside of Japanese regulation.

ASIC vs. binary options

ASIC of Australia conducted a raid on a binary options boiler room, arresting the two owners. 

The scammers succeeded in making over half a million Australian dollars from their operation. After pleading guilty, they were both given suspended prison sentences.

ICO warnings

SEC chairman Jay Clayton warned against ICOs in a speech at the annual symposium of the Practicing Law Institute, expressing worry about the integrity of the market.

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“Investors often do not appreciate that ICO insiders and management have access to immediate liquidity, as do larger investors, who may purchase tokens at favorable prices. Trading of tokens on these platforms is susceptible to price manipulation and other fraudulent trading practices,” he said.

German regulator BaFin also warned investors of the risks involved in the new fundraising phenomenon. BaFin mentioned the systemic vulnerability of ICOs to fraud, money laundering and terrorist financing. It also pointed out the common occurrence of investors losing the entirety of their investment following the collapse of a project.

Finally, the Chairman of the ISA in Israel gave a talk at a fintech conference in which he discussed his worries regarding ICOS.

He did not condemn the projects outright, and said that Israel would not be banning them. However, he explained why the industry has all the hallmarks of a bubble. Said Hauser: “I want to make sure that the world of coins is not a new mutation of the binary options industry.”  

Bitcoin Cash explodes

On Wednesday, Bitgo CEO Mike Belshe proposed delaying the Segwit2x hard fork, following community disagreement. He said: “Our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of SegWit2x.”

Bitcoin hit another high of $7,900 on the same day.

On Friday we reported that Bitcoin Cash, the result of the SegWit hard fork in August, rose by 37 percent in one day. At a price of $870, it overtook Ethereum as the digital coin with the second largest market cap.

The move is seen as the result of the decision to cancel the SegWit2x hard fork. 

The end of Global Brokerage

On  Saturday we reported that Global Brokerage filed for a chapter 11 and will delist from NASDAQ. FXCM Group is not involved with the Chapter 11 filing.

FXCM on the same day released a statement confirming that it is not affected. CEO Brendan Callan said: “FXCM clients should know that Global Brokerage’s refinancing does not affect FXCM Group, which continues to operate as usual. Global Brokerage’s plan is positive news for FXCM as it allows us to put GLBR’s distractions behind us.”

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