Weekly Summary: 26 Degrees Surrenders CySEC License, FTX Bankruptcy Plan, and More

26 Degrees Is Surrendering CySEC Licence

Our top story of the week: 26 Degrees is giving up its CySEC license. However, the company plans to maintain its Limassol office, which will now cater to the company’s global activities. The move is reportedly informed by the firm's decision to focus on institutional services, particularly hedge fund operations, amid growing regulatory challenges with the Cypriot authorities.

The decision may also be linked to the recent departure of Riana Chaili, the former CEO of the EMEA region. We reached out to 26 Degrees, but the company declined to comment. Besides this, Lochlan White recently stepped down from his role as EMEA Chief Commercial Officer to join Scope Prime. His departure occurred after dedicating 11 years in various roles.

CMC Markets Turned a £2M Loss into a £51M Profit

CMC Markets released its financial outlook report for the first half of the fiscal year 2025. In the report, the company highlighted significant growth and operational efficiency. It expects net operating income for the six months ending September 30, 2024, to reach approximately £180 million. This represents a substantial 45% increase from £123 million in the same period last year.

This growth is attributed to the company's ongoing diversification strategy and expansion in the B2B segment, coupled with sustained client trading activity. In a notable turnaround, CMC Markets projects a profit before tax of around £51 million for H1 2025, compared to a £2 million loss in the previous year's corresponding period.

FXSpotStream Enlists Australia's ANZ as Liquidity Provider

Australia’s bank ANZ joined FXSpotStream to boost its FX wholesale liquidity capabilities. This partnership positioned the multinational bank among 17 global liquidity providers on the multibank FX aggregation service platform. ANZ joins a group of other liquidity providers, including Bank of America, JP Morgan, and Barclays.

FXSpotStream expects to enhance its trading services by eliminating execution costs for liquidity providers' price takers. ANZ’s inclusion as a liquidity provider aims to tap into Australia’s Asia-Pacific FX markets. The company targets ANZ’s expertise in AUD, NZD, and Asian currencies to complement FXSpotStream’s existing offerings.

FD Technologies to Sell First Derivative Business for £230 Million

FD Technologies announced that it has agreed to sell its First Derivative Business to EPAM Systems for £230 million ($290 million). This marks a significant restructuring for the Northern Irish technology firm. The divestment, expected to close in Q4 2024 pending shareholder approval, comes as the culmination of a strategic review initiated by FD Technologies in March.

The move aims to streamline the company's focus on its KX division, which specializes in real-time analytics and AI-driven solutions. After adjustments and costs, the transaction is projected to generate net cash proceeds of approximately £205 million. FD Technologies plans to use the funds to repay about £20 million in net debt and return excess cash to shareholders. The details will be announced in November.

LMAX UK Reports Higher Revenue but Net Loss in 2023

This week, UK-registered and licensed subsidiaries of LMAX Group released its financial reports for 2023. Although their combined revenue grew compared to the previous year, increased administrative costs prevented them from achieving a net profit.

According to LMAX Limited's report, LMAX Exchange achieved trading volumes of $4.5 trillion in fiscal year 2023. It is a 5% increase from the previous year. Average Daily Volumes (ADV) rose to $17.4 billion, achieving a CAGR exceeding 10% over the past five years.

Tickmill UK Reports Revenue Rise to £6.6 Million, Net Profit Drops to £77.5K

Tickmill UK Ltd, a unit of the Tickmill Group regulated by the Financial Conduct Authority (FCA ), published its financial results for the year ending December 31, 2023. The company recorded revenue of £6,641,693, an increase from 2022. This rise in revenue indicates a positive trend in the company's ability to generate income.

According to the latest filing with Companies House, Tickmill UK's administration expenses surged to £9.5 million, reflecting an increase of approximately 68% from last year. However, the company reported an operating profit of £107,188. The pre-tax profit for the year was £122,905. These figures suggest that the company maintained some profitability despite rising costs.

Broker Exits UK Despite £1.3 Million Net Profit

TrivePro, a UK-based broker, ended its operations in the country this year. However, its parent company, Trive Financial Services UK Limited, was still required to release its annual financial numbers as per regulatory obligations. Despite the report revealing a 50% drop in net profit, the report gave no indication of possible cessation of trading activities.

According to the latest report published in the UK's Companies House, Trive Financial Services UK Limited generated revenue of £8.9 million last year, which is 18% less than the £10.8 million from 2022.

Institutional Liquidity: The Common Pitfalls Retail Brokers Face

Institutional liquidity refers to markets where large institutions trade with one another. These markets consist of multiple available assets for trade with prices (and tiered volumes) on both sides. Companies involved in such operations are also known as market makers because they create active markets for traders.

Institutions typically have access to better conditions due to several critical factors, including economies of scale, access to advanced technology, direct market access, preferred counterparty status, regulatory flexibility, and exclusive market opportunities.

📣 #ESMA is seeking input on Liquidity Management Tools for funds under the revised AIFMD and the #UCITS Directive.

🗓️ Send your input by 8 Octoberhttps://t.co/LxNEEX7i2O pic.twitter.com/6G2K4CVVim

— ESMA - EU Securities Markets Regulator 🇪🇺 (@ESMAComms) July 8, 2024

Consumer Duty at One: FCA Pushes Firms for Evidence of Progress

The Financial Conduct Authority’s (FCA’s) Consumer Duty officially came into action over a year ago, with an implementation deadline of 31st July 2023 for all new and existing products and services. The regulator favored a phased approach, with different obligations landing at different stages throughout the adaptation.

This concluded in July 2024, the deadline for closed products and services, and also for firms’ first annual reports on complying with the new regulations. The one-year anniversary is an appropriate milestone to assess the Duty’s impact so far, how well it has fulfilled its objectives, and how we’re likely to see it evolve.

FTX Bankruptcy Plan Approved, Promising 119% Return to Creditors

The US bankruptcy judge Jon Dorsey approved the reorganization plan for FTX, paving the way for the defunct cryptocurrency exchange to repay billions of dollars to its creditors. The decision marked a significant update in the company's efforts to wind down operations and compensate affected customers.

Under the approved plan, 98% of FTX creditors are slated to receive approximately 119% of their allowed claims within 60 days of the plan's effective date. The company projects that between $14.7 billion and $16.5 billion will be available for distribution. The sum includes assets recovered from various sources worldwide.

The FTX Debtors today announced that the United States Bankruptcy Court for the District of Delaware has confirmed FTX’s Plan of Reorganization. Read about it here: https://t.co/kETV0rgs0v

— FTX (@FTX_Official) October 7, 2024

FTX’s Ryan Salame's Crazy LinkedIn Update: “New Position as Inmate”

Social media updates about personal and professional lives have become common nowadays, but sometimes, some posts attract attention because they are unhinged. Ryan Salame, the former co-CEO of FTX, made such an absurd post on LinkedIn, updating on his “new position as Inmate at FCI Cumberland.”

Salame, once a high-ranking executive at the now-bankrupt FTX, was sentenced in May to seven and a half years in prison for fraud charges and conspiracy to operate an unlicensed money-transmitting business.

Crypto.com Takes SEC to Court, Claims Regulatory Overreach

And in the crypto space, Crypto.com sued the US securities watchdog for allegedly overstepping its mandate. The crypto exchange claims the Securities and Exchange Commission (SEC) extended its jurisdiction beyond statutory limits by interpreting crypto assets as securities.

This lawsuit reportedly followed a Wells notice by the regulator against the company. In its statement, the exchange argued that the SEC had imposed an unlawful rule categorizing most crypto transactions as securities, while transactions involving Bitcoin and Ether escape this classification.

Anthony Scaramucci Criticizes Warren-Gensler “Hegemony” in US Crypto Regulation

Anthony Scaramucci, the Founder of SkyBridge Capital investment firm, voiced criticism of the current state of cryptocurrency regulation in the United States. The former White House Director of Communications called for a more bipartisan approach and suggested that the European Union's Markets in Crypto-Assets (MiCA) regulation could influence US policy.

In an exclusive comment to Finance Magnates, Scaramucci emphasized the importance of collaborative actions across divisions in terms of market regulation. “I think it's very important that we have a bipartisan commitment to crypto,” he stated, praising the efforts of Senators Kirsten Gillibrand and Chuck Schumer from New York.

AI–Claude, Quillbot, Question.AI, and Suno… ChatGPT Better Watch Out

If you thought the gold rush was a thing of the past, think again! OK, these days, we’re talking zeros and ones rather than Au, an AI gold rush, if you like. And the tech titans are the prospectors. The latest innovations in artificial intelligence (AI) are turning heads—and wallets. From deep learning to generative AI, the tech landscape is evolving faster than you can say “machine learning.”

First up is OpenAI's ChatGPT. What started as a conversation tool has now morphed into an essential piece of digital infrastructure for all sorts of work. The recent updates to ChatGPT, including enhanced contextual understanding and improved conversational capabilities, are making it a staple in businesses across myriad sectors.

When French Fries Fail: Is McDonald’s (and the US Economy) in Trouble?

Lastly, in what may seem like a small blip in the vast world of corporate America, Lamb Weston, the largest French fry supplier for McDonald’s, has just closed one of its factories. The company cited meal deals (and smaller fry portions), promotional deals, and inflationary pressures as the main culprits for falling fry sales.

Lamb Weston president and CEO Thomas Werner specifically highlighted the value deals created by a wide range of fast food chains as impacting french fry sales. The shutdown has sparked concerns about supply chain issues that might impact the fast-food giant’s ability to serve one of its most iconic menu items: McDonald’s french fries.