Cryptocurrency Exchange Coinbase Granted BitLicense in New York



Coinbase, a San Francisco-based cryptocurrency exchange, today becomes the fifth digital currency business to obtain a BitLicense in the state of New York. Maria T. Vullo, Superintendent of the New York State Department of Financial Services (DFS), made the announcement today.

"Through the creation and promotion of strong state-based regulation, DFS continues New York’s long record of being responsive to technological innovation,” she said.

According to the DFS press release, Coinbase underwent a comprehensive review of its anti-money laundering and cyber security policies before getting approved for the new license.

Brian Armstrong, CEO of Coinbase, said:
“We're thrilled to have obtained the BitLicense and look forward to expanding our business in New York.”
To date, a total of five firms have received BitLicenses in New York from the DFS: Coinbase, XRP II, Circle Internet Financial, Gemini and itBit.

Juan Suarez, a member of the Coinbase legal department, explained in a post on the Coinbase blog that cooperation between financial regulators and bitcoin firms is needed for the continued growth of the industry, “We believe the long-term success of virtual currency and blockchain technologies will require productive partnerships between industry and government,” he writes.

Theresa May's Brexit Speech Sends Pound Rocketing Higher Against US Dollar by 3.4%



Yesterday’s crash in the British pound has been completely erased today as British Prime Minister Theresa May struck a friendly tone in her Brexit speech, “We are leaving the European Union, but we are not leaving Europe,” she said.

The British PM called for a “new, positive and constructive partnership between Britain and the European Union.”

May’s speech sent the pound skyrocketing against the dollar, completely erasing the 1.5% drop from Sunday. At press time, the British pound has gained approximately 3.4% against the greenback, hitting a daily high of 1.2414!



In her speech, Theresa May outlined a 12-step strategy for maintaining UK stability and successfully persevering the economic ties between the United Kingdom and the EU, in a post-Brexit environment.

-Certainty and clarity on all negotiations.
-Full control of UK laws, no more influence from the EU courts.
-Strengthen the ties between the four nations of the UK (England, Scotland, Wales, and Northern Ireland)
-Maintain common travel area with Ireland.
-Control of immigration.
-Reciprocating rights for European & British citizens in the UK and the EU.
-Preserving & translating EU worker rights in the UK.
-Robust Free Trade Agreements with various EU member states.
-New FTAs with countries outside the EU
-Collaboration with EU on technological innovation
-Cooperation with the EU in fight against terrorism and cross-border crime
-An orderly Brexit process

The details of Britain’s withdrawal from the EU are still being worked on, and Theresa May explained in today’s speech that her cabinet will put the Brexit deal to a vote in Parliament:
“I can confirm today that the Government will put the final deal that is agreed between the UK and the EU to a vote in both Houses of Parliament, before it comes into force.”
While May’s address struck a conciliatory tone, the British PM also made it clear that the right balance must be struck on the Brexit deal, “No deal for Britain would be better than a bad deal for Britain,” she stated.

British Pound Sinks 1.5% Against Dollar on Sunday as Theresa May Seeks "Hard Brexit"



The British pound opened down approximately 1.5% against the dollar in early trading, Sunday. At it’s lowest, the pound was trading at 1.1995 against the greenback, before gaining some ground in the hours following the opening of the Australian currency markets.

The precipitous fall in the pound was spurred by press reports that suggest Theresa May is looking to leave the EU single market and customs union - a major point of contention in the Brexit negotiations - in order to regain full control over UK immigration policy.



The British MP is scheduled to give a speech at London’s Lancaster House, on Tuesday, in which she will make the case for a clean breakaway from the European Union and a more united Britain.

“So the country is coming together. Now we need to put an end to the division and the language associated with it – Leaver and Remainer and all the accompanying insults – and unite to make a success of Brexit and build a truly Global Britain,” May is expected to say on Tuesday, according to a Sunday Telegraph report.

Many financial firms based in the UK have made it clear they plan to move to Ireland and the EU if Brexit negotiation fail to preserve single market and passporting rights for British firms.

LMAX, a London-based and FCA-regulated FX marketplace, issued a statement in October, 2016, saying the firm plans to leave the UK in 2017 if Brexit negotiations break down:
“LMAX Exchange will begin regulatory filings in Ireland in January 2017, if no UK Government assurances are received.”
Statements by firms like LMAX regarding the repercussions of a “full Brexit” are very much at odds with some parts of the MP’s planned speech on Tuesday, “Business isn’t calling to reverse the result, but planning to make a success of it,” May will say.

Bitcoin Adoption Grows in Russia; Head of Bank of Russia, Olga Skorobogatova, Says Bitcoin To Be Regulated, Not Banned



The future of digital currencies in Russia remained uncertain for most of 2016, but recent comments by the Olga Skorobogatova, Deputy Governor of the Bank of Russia, have shed some light on how Russian financial regulators feel about cryptocurrencies.

In an interview at the 2017 Gaidar Forum, Skorobogatova told the press that there are no plans to impose any bans on the usage of Bitcoin within the Russian Federation at the present time:
“As to Bitcoin, which is a private currency, it has became clear that things are not as simple and as it is written in books and magazines. The position of the regulatory agencies is that we would not like to specifically prohibit it, but we would like to first understand it, and then build a regulatory framework.”
Skorobogatova’s remarks are in sharp contrast to other Russian officials like Deputy Finance Minister Alexei Moiseev, who has made repeated attempts over the last two years to pass legislation that would impose stiff prison sentences on bitcoin users within Russia.

But despite the opposition from some regulators, bitcoin usage and popularity within the Russian Federation has grown substantially in 2016. More recently, St. Petersburg-based fitness chain, NanoFitness, began accepting the digital currency at several of their fitness studios in St. Petersburg and Tyumen.

Bitcoin sign posted at the door of NanoFitness

And in December, 2016, Russian presidential candidate and fierce Putin critic, Alexey Navalny, started accepting bitcoin donations - in addition to PayPal and Yandex.Money - for his campaign in the 2018 election. As of today, Navalny’s bitcoin donation address has received approximately 22.6 BTC ($18,758/1,117,976.8 Russian rubles) in donations.

Leonid Volkov, who heads Navalny's presidential campaign, said in a tweet that bitcoin donations represent 15% of all donations received so far.

Chinese Bitcoin Exchange BTCC Halts Leveraged Trading as PBoC Inspections Continue

Following the surprise inspections of China’s largest bitcoin exchanges (BTCC, Huobi, OKCoin) by financial regulators from the PBoC over the last few days, which sent the price of the digital currency plunging to $720, BTCC has announced the suspension of all margin trading & lending until further notice:


In an interview with Chinese fintech news outlet Sina.com, CEO of BTCC, Bobby Lee, explained that all Chinese digital currency trading venues operate in the “grey areas” of Chinese financial regulation.

Lee also said inspectors from the PBoC showed great interest in the inner workings of BTCC during their onsite inspection, “PBoC also asked BTCC to prepare a report on the details of the exchange operations,” he adds.

Other major Chinese exchanges have also hinted at limiting leveraged bitcoin trading. Huobi, the third largest bitcoin exchange by volume on China, said leveraged trading may be limited if market conditions warrant it:


OKCoin, the largest Chinese exchange by volume, has also temporarily reduced leveraged trading to 1x, according to 8btc.


TOR-Based, P2P Digital Currency Exchange Bitsquare Seeks to Rebrand Due to Legal Complications



Bitsquare, a peer-to-peer digital currency exchange that uses the TOR network to anonymize transactions, announced today it will be rebranding due to legal complications related to the name itself. Mihail Mihalov, communications manager at Bitsquare, said the difficulties arose when the Bitsquare development team attempted to legally establish the Bitsquare name, but learned that someone else had already registered a similar brand:
“The team recently initiated brand registration, but as it often happens, the name was opposed. It turns out, though to no one’s surprise, our project is not the first one to come up with the term “square” in its name.”
“To avoid a lengthy and expensive legal process, we will have to find another name,” writes Mihalov.

Lead developer and founder of the Bitsquare project, Manfred Karrer, has turned to the Bitsquare community for help in finding a suitable alternative. Karrer has offered a 0.5 bitcoin ($400 at current exchange rates) reward to the party responsible for composing the best name.

The contest will run through February 20, 2016, and the winner will be selected by the Bitsquare team. So far, more than 30 unique entries have been submitted on the official contest forum thread.

While the Bitsquare platform is one of the few bitcoin trading venues where participants are not required to undergo any KYC/AML checks to freely engage in any type of fiat-to-bitcoin transaction, trading activity on Bitsquare has been subdued for most of 2016.

However, turnover picked up in the first week of 2017 in Europe, Switzerland and the United Kingdom, according to data on Coin.dance.

FXCM Posts Declines in Retail and Institutional FX Volumes for December of 2016



New York-based FX broker, FXCM Inc, has reported today a 33% drop in retail trade volume for the month of December. According to the press release, retail trading turnover came in at $235 billion, which is “33% lower than November 2016 and 27% lower than December 2015.”

FXCM also revealed that total retail turnover for 2016 was $3.5 trillion - an 8% drop when compared against figures for 2015.

Average daily volume was also down in December: $11.2 billion, 24% lower when compared to figures from December of 2015.

Institutional metrics:

Just like the downward trend in retail volumes, turnover on FXCM originating from institutional clients was also lower during the last month of 2016. Institutional volume on FXCM for December came in at $25 billion, about 31% lower than December of 2015.

Total institutional volume for all of 2016 was $527 billion - only 1% lower than total turnover for 2015. However, the average daily volume in December was much lower:
“Average institutional trading volume(2) per day of $1.2 billion in December 2016, 8% lower than November 2016 and 25% lower than December 2015.”
While FXCM did see an overall decline in institutional FX volumes in December, the average amount of institutional client trades per day for December, 2016, increased by double digits when compared to averages from December of 2015:
"An average of 34,649 institutional client trades per day in December 2016, 3% lower than November 2016 and 18% higher than December 2015."
At press time, FXCM shares are trading in a tight range around $7.34, up approximately 7.28% since the start of 2017.



European Cryptocurrency Marketplace Bitstamp Integrates the Ripple Digital Token



European digital currency exchange Bitstamp has kicked off 2017 with the integration of a new blockchain asset, Ripple (XRP). Bitstamp said in the release that traders will be have access to two markets: XRP/USD and XRP/EUR.

Trading on both pairs will official begin on the January 17, with no trading fees until February 10, 2017. Bitstamp explained that fees will be gradually raised by 25% on a monthly basis until midnight on May 1, 2017, when fees on XRP pairs will be the same as BTC pairs.

Just like American exchange Coinbase, which recently held a Twitter poll to determine which digital currency to add, Bitstamp management also looked at multiple cryptocurrencies before settling on Ripple.

Nejc Kodrič, CEO at Bitstamp, explains:
“After evaluating a number of digital currencies for inclusion on our exchange, it soon became clear that customer demand for XRP was particularly strong.”
Miguel Vias, Head of XRP Markets, said traders and investors on Bitstamp will now have access to a innovative digital asset that is linked to the legacy banking system:
"Ripple's adoption with banks puts XRP in pole position to become a global settlement asset, which translates to more liquidity for Bitstamp, and more value for institutional and individual investors."

Bitcoin Plunges to $720 as PBoC Conducts Surprise Inspections of China's Largest Bitcoin Exchanges



Bitcoin’s price took a nosedive down into the $750 range today as one of China’s most prominent digital currency exchanges, BTCC (BTC China), is being inspected by the Shanghai Municipal Finance Office, along with several other inspectors from the PBoC.



According to the PBoC statement, the inspection is being carried out to determine “whether the scope of the enterprise is beyond the scope of the market, whether or not the exchange is without a license to carry out credit, payment, exchange and other related business; whether there is market manipulation; anti-money laundering system implementation; financial security risks and so on.“

BTCC has taken to Twitter to reassure customers that all is well:



There are some unconfirmed reports that OKCoin and Huobi, the largest Chinese bitcoin exchanges by trading volume, are also subject to a week-long onsite inspection by Chinese financial regulators.

Surprise onsite inspections of financial and securities companies by regulators in Asia is not a new trend. In October of 2016, the Hong Kong Securities and Futures Commission announced a review program for securities brokers as monetary damages related to fraud and hacking exceeded $100 million in Hong Kong last year.

While it is unclear what prompted the PBoC into these inspections, a recent report by the South China Morning Post states that regulators had noticed how some Chinese bitcoin exchanges (BTCC, OKCoin) became inaccessible to traders during high volatility episodes, especially rapid sell-offs, causing some highly leveraged speculators to bear large losses.

French Financial Regulator Releases Details on Advertising Ban of Binary Options & CFD Investments in France

France’s financial regulator (AMF) added some clarification today to the recently passed Sapin II bill, which restricts the advertising of risky financial products like FX binary options & CFDs to the French public.

According to a study carried out by the AMF, 90 percent of those who participated in these risky investments lost money over a 4-year period:
“Clients of leading services providers authorised by serious regulators reported EUR 175 million in losses compared with EUR 13 million in gains over four years and 90% of them lost money.”
The Sapin II anti-corruption bill - named after French Minister of Finance, Michel Sapin - was passed on November 8, 2016. Under the new provisions, the AMF and the General Directorate for Competition Policy, Consumer Affairs and Fraud Control are tasked with enforcing the new advertising ban with regard to three specific types of trading instruments: binary options, contracts for difference (CFDs) and foreign exchange contracts.

The AMF release states:
“In practice, this affects all stakeholders, such as investment services providers offering these contracts and all participants in the advertising chain (media buyers, ad space buyers, media or ad sales companies, ad broadcasters, etc.). AMF staff will conduct active monitoring to identify banned advertisements while the DGCCRF and the AMF may, in accordance with their respective powers, sanction those involved.”
The AMF also said they plan to work with CySEC in Cyprus to “ develop controls and sanctions against authorized companies in that state” which are in violation of the new regulations.

Turkish Lira Crashes to All-Time Lows Against Dollar; Trading in Bitcoin in Turkey Surges to New Record



Turkey’s national currency has tumbled 6.3% against the dollar since the start of 2017. The USD/TRY Forex pair hit an all-time high of 3.7442 today. The assassination of the Russian ambassador to Turkey in December in Ankara, along with the multiple bombings over the last several months, have lead to a rapidly deteriorating geopolitical and economic environment.



BMI Research released a report in December that showed Turkey’s rapidly deteriorating economic health. The report states:
“Our bearish outlook on Turkey's economy is playing out, as growth contracted for the first time since 2009 in Q316. Real GDP shrank by 1.8% year-on-year in the quarter, driven largely by falling investment and slowing private consumption. Growth in Turkey has proved remarkably resilient over previous quarters in the face of rising headwinds, however the most recent GDP data suggests that the economic situation is now deteriorating.”
And it’s not just poor economic conditions & terrorism that are responsible for the crash of Turkey’s national currency. The Turkish lira was trading under 3.1 to the dollar for most of 2015 and 2016, but Trump’s election sent Turkey’s currency plunging close to 14% in the space of 23 days, between Nov. 9 and Dec. 2, 2016.



While Turkish President Recep Tayyip Erdogan has asked patriotic Turks multiple times to convert their foreign assets into lira to halt the plunge of the Turkish currency, there is now evidence that some Turkish citizens have started looking into digital currencies to escape the plunge of the lira.

Just like in Malaysia, where Bitcoin trading volumes began to surge in the weeks following Trump’s election as the Malaysian ringgit began to crash against the dollar, some nervous investors in Turkey have also turned to Bitcoin to preserve purchasing power as the lira’s fall accelerated in the last two months of 2016.

Charts from Coin.dance, which tracks turnover figures in various countries on LocalBitcoins - a popular P2P Bitcoin trading marketplace - show the first big spike in Turkey taking place in the week following Trump’s election: TRY349,346 worth of trading took place for the week ending on 2016-11-19.

The first week of 2017 show a new record of TRY366,285 worth of Bitcoin trading on LocalBitcoins in Turkey!



Malaysian Ringgit Hits 18-Year Low Against US Dollar; Bitcoin Trading in Malaysia Continues to Climb



The Malaysian ringgit had a terrible year, dropping 17% against the greenback since April of 2016. The ringgit did show some strength in the first four months of 2016, hitting a high of 3.843 on April 11, however, Trump’s election caused the Malaysian currency to drop precipitously during the the last two months of 2016.



While Malaysia’s currency has been in a downtrend since 2013, on January 4, 2017, the ringgit hit an 18-year low of 4.4995 against the greenback - a price not seen since 1998.

And the ringgit is expected to weaken even further in 2017, according to a BMI Research report, which states:
“Given that China is Malaysia’s largest export partner, we believe that Malaysia’s export-driven economy remains exposed and is likely to be negatively impacted.”
Additionally, BMI’s report states that interest rates hikes in 2017 by the FED may set the stage for further ringgit losses.

The ringgit’s horrible performance has not gone unnoticed by tech-savvy Malaysian investors, who are increasingly looking to alternative investments to preserve purchasing power.

Bitcoin, the digital currency that is not backed by any government or central authority, was heavily traded on LocalBitcoins - a P2P marketplace for digital currency traders - in Malaysia in the last two months of 2016.

In fact, the first big spike in volume on LocalBitcoins in Malaysia occurred in the week following Trump’s election, when RM1,595,772 worth of Bitcoin changed hands in the country.



And in the weeks following the U.S. election - as the ringgit began to drop very rapidly against the dollar - volume on LocalBitcoins continued to surge, hitting an all-time high of RM2,650,067 ($592,524) for the last week of December.



Kraken Exchange Integrates Anonymous Cryptocurrency Monero

San Francisco-based digital currency exchange Kraken opened the new year by adding privacy-focused cryptocurrency, Monero. While margin trading isn’t available yet, investors are currently allowed to trade Monero against bitcoin, euros and dollars.

Kraken said in their announcement that Monero is “one of the leading cryptocurrencies that has seen huge 40x market cap growth in 2016.”

Monero is one of the few digital assets that increased in value in tandem with Bitcoin’s rise to over $1100, while many other alternative digital currencies lost value over the same period. At the beginning of December, Monero was trading at 0.01176 against Bitcoin. Today, Monero is hovering around 0.0161!!



The privacy-centric Monero, which is in competition with other anonymous digital assets like Dash and Zcash for market share, is one of the top contenders for the next cryptocurrency to be added to Coinbase - one of the largest exchanges in the United States - according to a recent Twitter poll conducted by Coinbase CEO Brian Armstrong.

There are also rumors on social media that Honk Kong-based exchange Bitfinex may be adding Monero as well.

Banco de Mexico Intervenes in Currency Markets to Halt Plunge of the Mexican Peso



Banco de Mexico issued a communique today, saying The Exchange Commission - which is tasked with overseeing Mexico's exchange rate policy - intervened in the FX markets by selling dollars to halt the drop of the Mexican peso.

The Mexican central bank also stated that additional interventions could take place:
“The Exchange Commission does not rule out the possibility of re-intervening in the foreign exchange market in other sessions in the event of exceptional conditions.”
While the exact amount of dollars sold by the Mexican central bank has not been publicly disclosed, several FX traders told Reuters that the intervention amounted to approximately $1 billion dollars.

The central bank of Mexico was forced to prop up the nation’s sagging currency in February of last year as well, when it sold $2 billion in the open market.

The peso’s descent was halted for a short while in December, 2016, when Banco de Mexico hiked interest rates by 50 basis points, however, when Ford Motor Company announced it would forgo a $1.6 billion plant construction project in Mexico two days ago as a result of President-elect Trump’s protectionist policies, the peso plunged 4.6% in the space of two days.



The peso hit an all-time low of 21.621 against the dollar on Wednesday - about 1% lower than the previous all-time low of 21.3865, which was recorded on November 11, 2016. At press time, the USD/MXN pair is trading at 21.39!