This past week has been full to the brim with developments in both the foreign exchange (forex) and cryptocurrency industries. This week, ESMA ceased the renewal of its product intervention measures, and the Facebook Libra saga continues. In our latest edition of the best of the week segment, we cover all of this and more.
ESMA is done with CFDs
After a full year of ESMA enforcing its temporary product intervention measures on contracts-for-differences (CFDs), the regulator announced this week that it would no longer be renewing the measures.
This decision was not a surprise to the market, as almost all European Union (EU) countries have adopted their own national permanent measures, which largely echoed that of ESMA’s. As Finance Magnates reported, the decision also mirrors the watchdog’s move earlier this month when it ceased renewal of its temporary ban on binary options.
Poland allows 100:1 leverage, defying ESMA
While most EU countries implemented product intervention measures for CFDs that mirrored that of ESMA’s, the Polish Financial Supervision Authority (KNF) announced this week that it unanimously decided that its product intervention measures will ignore criticism from the pan-European financial industry supervisor ESMA and will allow 100:1 leverage.
An experienced retail customer will be able to trade CFDs with a higher level of leverage only in select assets. The list includes all forex pairs, major stock indices, and gold. The KNF specified the following stock market benchmarks as major: FTSE 100, CAC 40, DAX30, DJIA, S&P 500, NASDAQ Composite, NASDAQ 100, Nikkei 225, ASX 200, and EURO STOXX 50.
Find out more on the controversial move by the KNF here.
Analysis: legal liability in the crypto space – who is responsible?
The next topic featured in our best of the week segment was written by Finance Magnates’ crypto-journalist Rachel McIntosh, who analyzed an important question – which regulators should users of any cryptocurrency or crypto-related service provider turn to in the event of a crime?
What’s more–when dealing with decentralized networks, who can be held legally responsible for bad things that happen? Check out what she found here.
Interview: CEX.IO US CEO: there are lots of opportunities in the US
Through a partnership with XTRD.io, CEX.IO now has a Chief Executive Officer (CEO) for its operations in the US, which were officially launched on Independence Day on July 4.
Recently, CEX.IO has been expanding its presence in America. The partnership will see CEX.IO focus more on the institutional space in the US. We caught up with Alexander Kravets, the US CEO of CEX.IO.
In this interview, we discussed the cryptocurrency exchange’s plans for the US, upcoming products, the crypto industry, as well as what Libra could mean for the sector. Read what he said in our interview here.
CySEC powers get a boost
This week, the CySEC revealed that it is getting a significant boost to its legal powers. According to the law which was amended in April 2019, CySEC’s powers have been increased to enable it to better meet its responsibilities and obligations as a financial supervisory authority.
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As Finance Magnates reported, previously persons and companies under investigation could refuse to provide the CySEC with information that would constitute correspondence or communication.
Since the adoption of the new legislation, this provision is essentially eliminated. The CySEC now has the ability to collect all the required information, enabling it to conduct audits and investigations.
Fraud Lawsuit against Mt. Gox CEO is going ahead
The former CEO of Mt. Gox got some bad news this week after a US federal judge rejected his attempt to dismiss a lawsuit over his handling of the exchange during his time as its “sole controlling force.”
As Finance Magnates reported, a press release confirms Mark Karpeles will face court over allegations of leaving major security holes that led to future hack attempts.
FMA suspends AxiCorp’s derivative issuer license
The FMA of New Zealand has suspended the derivatives issuer license of AxiCorp for “material breaches” of the Financial Markets Conduct Act 2013. The New Zealand regulator has accused the firm of three main breaches.
Those are, not having a compliant Product Disclosure Statement or Disclose register entry, not lodging audited financial statements and not having a qualified auditor for its processes, procedures, and controls within four months of its balance date.
AxiCorp responded to the FMA’s decision. To find out what they had to say, click here.
Analysis: Will China and Russia be Libra’s refuge?
Soon after Facebook released the whitepaper for its stablecoin Libra, regulators and lawmakers alike pounced. Within days, task forces were formed, senate and congressional hearings were scheduled, and it was clear that Facebook was going to have to run the regulatory gambit if it wanted to see its project come to fruition.
As Finance Magnates explored, Libra could manage to take hold in the Chinese market if Facebook is willing to meet the Chinese governments’ possible demands. Find out how this could be achieved here.
LSEG confirms $27 billion acquisition of Refinitiv
Refinitiv shareholders have agreed on definitive terms with the London Stock Exchange Group (LSEG), the exchange operator announced this Thursday, under which LSEG will acquire the company in an all-share transaction for around $27 billion.
As Finance Magnates reported, the acquisition could be the biggest M&A deal in the intermediary sector this year and will see it become a UK-headquartered, global rival to Bloomberg.
Analysis: Is Facebook Trying to End Encryption?
Is Facebook looking to end encryption forever? That sentence might sound chilling, given the social network giant’s past mistakes with handling data privacy; however, it might be a real reality.
As Finance Magnates analyzed, Facebook seems to be creating an AI-powered means of bypassing end-to-end encryption on WhatsApp, a method that could potentially be used for wiretapping purposes that have no association with Facebook.