Another week has passed on the cryptocurrency and forex markets. Between ASIC’s dramatic announcement on leverage restrictions on CFDs trading, the push-back on Libra and the green light for Bakkt, it was a busy week.
Should you back Bakkt?
It’s been more than a year since the Intercontinental Exchange announced it was launching Bakkt – an exchange for trading in cryptocurrency futures.
Twelve months later and the product has, after several hiccups, finally been brought to market. But since ICE first announced its plans, a lot has changed in the world cryptocurrency.
Massive dips in the price of bitcoin, more regulatory scrutiny, and a larger number of competitors all mean that Bakkt has entered into a very different cryptocurrency market than the one it set out to join.
If you’re going to Vanuatu (be sure to use 100000:1 leverage)
Since ESMA’s leverage-crippling regulations were introduced in August of last year, almost every falafel lover, gyros eater, pint drinker, and pelmeni muncher has been looking for a way to get around them.
The most common way has been to simply redirect clients to an offshore service.
A dubious practice that likely infringes upon regulatory standards, Finance Magnates found this week that a number of respected, EU-regulated brokers are more than happy to carry it out.
The eFX machine continues undaunted
Once filled with hearty chatter, the sounds of ringing phones and cries that “the old lady just bought ‘alf a yard of cable,” currency trading rooms are now more subdued.
Gone went the voice brokers. In came the automated trading systems and socially inept physics PhDs.
And this week JP Morgan announced the launch of a new generation of eFX trading.
With the creepy name ‘DNA: Deep Neural Network for Algo Execution,’ we think it won’t be long until Arnold Schwarzenegger has to come back from the future and stop the investment bank’s trading algorithm from taking over the world.
Free from Libra
Facebook is a company that routinely spies on and manipulates its customers. In return, those people get to ‘like’ stuff and scroll through news feeds filled with pictures of people they went to high school with thirty years ago.
The social media company recently announced that it was launching a cryptocurrency in partnership with 28 different companies, including Visa, Spotify, and Coinbase.
But now three of those companies are apparently trying to pull out of the deal, which saw each company contributing $10 million.
European lawsuits and increasing regulatory scrutiny have – allegedly – spooked some of the companies.
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Seizing the day
Afraid of being destroyed by AML and KYC regulations, big banks have largely kept cryptocurrency companies at arm’s length.
However, a number of smaller firms, including Silvergate Bank and the Metropolitan Commercial Bank, have stepped into the fray to lend the crypto-sphere a helping hand.
And last week, Finance Magnates’ very own Rachel McIntosh took a look at how these small fish are starting to become big players in the cryptocurrency industry.
Coincheck goes IEO
Since people got ripped off a bunch of times via initial coin offerings, initial exchange offerings have grown in popularity.
IEOs allow an exchange to launch a particular token. Before they list they should – at least in theory – do a thorough study of the coin to ensure it isn’t just a scam.
To meet demand, it seems that Coincheck, which is owned by Japanese giant Monex, will be launching its own service.
Gavin Bambury to lead OANDA
After a quarter-century in the trading technology space, including stints at Citi and Deutsche Bank, Gavin Bambury was appointed to lead FX broker OANDA last week.
Based in the broker’s London office, Bambury’s appointment comes six months after Vatsa Narasimha stepped down from the position.
We wish Bambury the best of luck in his new role.
INX looks to the US for IPO
Cryptocurrency exchange INX, which is led by ex-Anyoption CEO Shy Datika, is looking to America for help.
In an ambitious set of plans, the exchange is hoping to raise close to $130 million via an IPO in the Land of the Free.
The exchange is also seeking to receive a money transmitting license in the United States for its registration as an alternative trading system.
The big guns respond to ASIC
In a move that surprised absolutely no one, the Australian financial regulator announced this week that it is going to be banning binary options and capping leverage on CFDs.
All three firms said they are ready for any regulatory changes. In fact, the experience of ESMA, with traders starting to put down more cash for margin requirements, seems to have prepared them for the changes down under.