Digital Currency Exchange Bitfinex Limping Along Following $70 Million Bitcoin Mega-hack in August

Image credit: Gustavo Molina


Hong Kong-based Bitfinex used to be one of the top Bitcoin exchanges in the world, but the devastating hack on August 2, 2016 - where $70 million worth of client Bitcoin deposits disappeared overnight - left Bitfinex fighting for dear life and plenty of furious customers.

The exchange managed to re-launch on August 7, and on the 10th, Bitfinex allowed traders to withdraw approximately 63.933% of their money, after imposing a 36.067 percent haircut across all depositors.

To offer some measure of relief to angry customers, Bitfinex also launched the BFX token, which was essentially a promise by Bitfinex to repay client losses at some point in the future, assuming sufficient revenues and influx of capital from investors materializes. Bitfinex opened the token for trading and launched a Special Purpose Vehicle (SPV) on the BnkToTheFuture crowdfunding platform on August 22, where qualified (non-US Bitfinex users) BFX token holders could convert their tokens to ownership shares in Bitfinex itself.

In addition to the token conversion program, Bitfinex has conducted two BFX token redemptions where a certain percentage of all outstanding tokens held in wallets on the platform are converted back to dollars. The first redemption took place on September 1, 2016, where 1.1812% were redeemed, and another redemption took place today for 1.3152 percent.

Two months after the hack:

Despite good-faith efforts made by Bitfinex management to restore investor confidence, volumes on the exchange are currently a small fraction of what they were prior to the monumental theft. Data from BitcoinCharts.com shows the drastic drop in volume on the Bitfinex BTC/USD pair after the hack:
chart source: https://bitcoincharts.com/charts/bitfinexUSD


Almost two months after the incident, USD margin funding volumes on Bitfinex have also not recovered. Prior to the hack, daily swap volumes would easily exceed $5 million, post-hack, daily turnover hardy goes above $2 million. This chart from Bfxdata.com illustrates this fact quite well:

chart source: https://www.bfxdata.com/swaphistory/usd


At press time, the majority of trading on Bitfinex takes place on BFX/USD and BFX/BTC, with 24h-volumes on both pairs at $1,067,731 and $464,592, respectively. The other two pairs that have any notable volume are ETC/USD and ETC/BTC. Volume on the BTC/USD pair over the last 24h, last 7 days and last 30 days is quite small compared to the figures on the other pairs.

chart source: https://www.bitfinex.com


While volumes indicate that investor confidence has not been restored just yet, the BFX token - which crashed down to $0.20 on opening day - is now trading at $0.60!

Retail Forex Broker FXCM Sells DailyFX to IG Group for $40 Million



Forex Capital Markets Inc., one of the largest FX retail brokers in the United States, has entered into a deal with IG Group for the sale of DailyFX, a market news and research portal owned by FXCM. Per the press release, the IG will be buying DailyFX for $40 million, with the deal closing by the end of October.

The sale will see IG take possession of all domains, intellectual property and the site’s 34-employee team.
“FXCM will continue to be an advertiser to U.S. and Canadian residents on the DailyFX English version of the website.”
FXCM will see a $36 million cash payment at the close, with another $4 million to be disbursed as certain transition milestones are met. FXCM took out a big loan from New York-based holding firm Leucadia in the aftermath of the Swiss National Bank’s decision to abandon its euro peg on January 15, 2015. FXCM said that proceeds from the sale of DailyFX will go towards paying down the Leucadia debt:
“Following this transaction, FXCM will have made loan repayments of $157 million to Leucadia with $153 million outstanding and will have repaid more than half its debt.”
Drew Niv, CEO of FXCM, said there will be no additional asset sales, "While DailyFX is a high quality asset and was not a targeted asset to sell, the opportunity came along and it was something we felt we should take advantage of,” he added.

In the announcement, FXCM states that it will continue to provide its clients with market research and trading education. The firm also mentioned the upcoming launch of FXCM Plus, a new service that will provide FXCM’s live traders with “proprietary data including signals, sentiment data (SSI), live webinars and technical alerts.”

Image credit: Twitter

The Israel Securities Authority Grants First Forex Licenses to FXCM and Four Additional Brokers

Image Credit


The Israel Securities Authority (ISA) granted five Forex brokers a foreign currency dealers' license today. According to the press release, Atrade Ltd, FXCM Trading Ltd, R.F.X Global Trading Ltd, First Index Ltd, Plus500 IL Ltd, have been green-lighted by the ISA to start operating in the country at the end of October, 2016.

As LeapRate reports, several others brokers had applied to the ISA for permission, however, ISA’s stringent FX regulations and restrictions have dissuaded many foreign currency dealers from establishing a presence in Israel. In May of 2015, 21 Forex dealers applied for a license with the ISA.

While many other Forex-friendly jurisdictions do not cap leverage ratios and perks like newcomer bonuses, the ISA has capped leverage at 100:1. The Israeli regulator has also forbidden bonuses or any other financial rewards to clients.

The Israeli financial watchdog requires comprehensive risk and conflict of interest disclosures, as the dealers are essentially counterparties to all trades executed on their trading platforms.

It is unclear at press time if the ISA will allow and binary options and CFD instruments by the five regulated brokers. Earlier this year, Israeli financial news outlet GLOBES reported on a leaked ISA document, which revealed that the agency considers binary options a form of gambling, and not a legitimate financial instrument.

A sentiment that has been echoed by other financial regulatory bodies like the AFM in the Netherlands, and Dutch minister of finance Jeroen Dijsselbloem.

Forex Broker FXOpen Adds Ethereum Deposits and Withdrawals

FXOpen - a regulated Forex broker in the UK, Australia and Nevis - announced today that all existing clients will be able to fund their trading accounts with the Ethereum virtual currency (ETH).

The minimum deposit amount is currently set at 0.01 ETH, with no maximum limits, according to the announcement page. FXOpen also decided to waive deposit fee, however, clients will be paying 0.01 ETH withdrawal fee.

Ethereum was launched in 2015 as a decentralized crypto-currency with the added benefit of smart contracts, which gave the innovative virtual token some features which are currently not available on the Bitcoin network.

At its height in March of this year, the Ethereum network was valued north of $1 billion - second most valuable digital currency after Bitcoin - and ETH was trading around 0.03 against BTC. The Ethereum blockchain forked (split in two) in July, 2016, due to various disagreements within the community on how to deal with the DAO incident, which created a second Ethereum blockchain known as Ethereum Classic (ETC).

FXOpen pointed out in their announcement that only ETH deposits are allowed, not Ethereum Classic; Litecoin & Namecoin are also supported:
"Please note that FXOpen allows making transactions via ETH only."


Unlike many over-regulated Forex brokers in the United States and Canada, which only allow funding via traditional methods, FXOpen has been very accommodating towards digital currency enthusiasts. In July, 2016, FXOpen rolled out its Bitcoin-funded ECN trading accounts.

FXOpen does not service residents of the United States.

Founders of Forex & CFD Broker Plus500 Offer 15.5 Million Shares of Company Stock to Investors



Plus500 Limited (LON:PLUS), one of the largest retail Forex & CFD brokers in the world, announced today the company founders (Alon Gonen, Gal Haber, Elad Ben-Izhak, Omer Elazari, Shlomi Weizmann) will be selling up to 15.5 million existing shares of the firm to qualified investors.

According to the press release, the sale represents about 13% of the firm’s share capital. The new offering (Placing Shares) is currently valued at £116.25 (£7.5 per share at current rates).

The general public is not eligible to participate in the Placing Shares as the deal will be mediated via an “accelerated bookbuild” exclusively to institutional investors.

Berenberg, Gossler & Co KG, a Hamburg-based multinational investment banking firm, and Liberum Capital Limited, a British investment banking & research company, will be overseeing the legal and financial particulars of the deal, with the final amount of shares and closing of the bookbuilding process to be determined by both firms and the founders.

Plus500 itself will not be compensated in any way from this offering. The LSE filing clarified that the owners of the firm will still hold about 22% of the total shares of the brokerage.

As part of the deal, the owners have agreed to not sell any additional shares for a period for 90 days after the completion of the current offering.

The Plus500 group was formed in 2008 and is currently the second best CFD broker in the United Kingdom, behind IG. According to the firm’s annual financial statement for 2015, Plus500 Limited posted a 20% increase in revenue to $275.6 million, with a net profit of $96.6 million and earnings per share at $0.84.

HolyTransaction Tells Clients to Stop Using Old Addresses Following Fraudulent Email



The HolyTransaction team has sent out another email yesterday, telling clients to stop using their old digital currency wallet addresses.

Last week, the firm revealed that a rogue employee had sent a fraudulent email to the entire customer base, telling everyone that the online wallet provider was closing down due to lack of VC investment and poor revenues, “After this fraudulent email was sent out to you, unfortunately, it took various days of disputes to re-establish our access safely,” reads the email sent by HolyTransaction.

In yesterday's communique, the embattled wallet provider stated that user funds were never compromised.

HolyTransaction has enabled login access for all users and everyone has been asked to create new login credentials:
“At this time, you are able to login to your account, check your balances, and please remember to change your password after your first login. While our users continue to change their passwords, we are going to wait a few days to restore the ability to send your transactions.”
Although the company has claimed a rogue employee sent the fake email, there has been no mention of the name of the perpetrator and what consequences they will have to face.

HolyTransaction has not responded to requests for comment.

Malaysian Central Bank Head Says Country's Dependence on Commodities & Oil is Not Responsible for Ringgit Slide

Image credit: TheStar


Datuk Muhammad bin Ibrahim, Governor of Bank Negra Malaysia, spoke yesterday about the poor performance of the Malaysian ringgit. In his speech at the MIER 30th Anniversary Dinner, held in the Dorsett Grand Hotel, in Subang, the central bank head explained that while the international monetary system has allowed the free flow of capital and goods, emerging economies have suffered as a result of “policy adjustments in major economies.”
“The initial hint of tapering by the Federal Reserve in May 2013 resulted in large reversal of capital flows and exchange rate over-shooting in emerging economies.”
In particular, Governor Ibrahim tied the lackluster performance of the ringgit to excessive volatility in the global financial system, which he claims is caused by fears over “monetary policy normalisation by the Federal Reserve.”

In his speech, the Governor stated that the “frequency of banking and currency crises” has increased substantially following the end of the Bretton Woods system of monetary management.

The head of the Malaysian central bank also took issue with the perception that ringgit weakness is a direct result of Malaysia’s reliance on commodities and oil.

Datuk Muhammad bin Ibrahim explained:
“Despite Malaysia’s lower dependency on commodities, the magnitude of ringgit depreciation is disproportionately higher and is even comparable to the currencies of countries that rely more heavily on commodities, such as Australia and Norway.”
Per the governor’s comments, Malaysian commodity exports added up to 19% last year, with oil and gas making up 11 percent. The entire energy industry is responsible for 22% of the Malaysian government’s revenues. As far the Datuk Muhammad bin Ibrahim is concerned, the size of the industry could not be the sole reason for the slide of the ringgit:

Source: XE.com


To combat ringgit volatility, the central bank head said that maintaining adequate currency reserves, focusing on fundamentals, and minimising exposure to foreign debt would be necessary.

As of September 15, 2016, the Malaysian central bank has RM392.5 billion ($97.7 billion) in foreign currency reserves; $89.7 billion in cash; $0.8 billion in International Monetary Fund reserves; Special Drawing Rights (SDRs) wmoorth $1.1 billion; gold valued at $1.5 billion; other assets valued at $4.6 billion.

Dutch Minister of Finance Jeroen Dijsselbloem Intends to Ban Advertising of Binary Options & CFDs in the Netherlands

Image credit: feedroll.com


Dutch Minister of Finance Jeroen Dijsselbloem stated his intent to ban the advertising of risky financial investments like Binary Options and contracts for Difference (CFDs) within the Netherlands, in a Parliamentary session on September 16, 2016.

Dijsselbloem will be collaborating with the Netherlands Authority for the Financial Markets (AFM) to craft the new legislation.

According to Merel van Vroonhoven, chair of the AFM Executive Board, enticing consumers with get-rich-quick schemes should be banned, as the likelihood of loss is quite high, "Advertising for these investments entices consumers with the prospect of earning money fast, but it is actually the case that you can easily lose all of the money you have put in," said Vroonhoven.
"We consider it very important to introduce an advertising ban on Binary Options and other toxic investment products,"
The AFM has fought tooth and nail to keep CFD brokers from entering the Dutch investment marketplace. Last year, Bas Jongmans of Gaming Legal Attorneys, forced the AFM to issue the first Binary Options license in the Netherlands to Optieclub, after filing a preliminary injunction with the Rotterdam Administrative Court.

Under current rules, foreign business can access the Dutch market via a European Passport, however, the AFM is now conducting a further inquiry into the CFD marketplace in the Netherlands.

In their most recent press release, the AFM also states that stricter rules for the industry are on the way with new regulations, expected in January of next year:
“Moreover, new European regulations (MiFID II) are expected in January 2018, which will make it possible to impose stricter requirements on high-risk investment products for consumers.”

New Regulations Force Popular Crypto-currency Exchange Poloniex to Close its Doors to New Hampshire Residents



Poloniex, a Delaware-based digital currency exchange and one of the most popular trading venues for alternative digital assets, will be closing its doors to residents of New Hampshire temporary basis, citing new virtual currency regulations in the state.

The exchange has informed all existing New Hampshire users to withdraw any remaining funds by October 6, 2016. As part of the suspension, existing New Hampshire clients have been blocked from trading and new registrations from the state have also been halted for the time being.

While Poloniex has been quick to implement the restrictions, the exchange explained that services in New Hampshire may resume at some point in the near future, pending the acquisition of certain licenses:
“Our legal team is working closely with the State of New Hampshire Banking Department and other regulatory agencies to verify that changes in their statutes apply to the services offered by Poloniex and to seek licenses where necessary.”
According to new crypto-currency statutes passed at the beginning of this year, anyone who facilitates the exchange between a virtual currency and fiat currency is classified as a money transmitter, which requires a license and a $100,000 bond, in addition to several other fees. The new rules do not apply to digital currency users, who use digital assets for purchasing goods and services.

New Hampshire regulators claim the new rules are designed to offer additional protections to the general public, however, critics say digital currency startups will be at a disadvantage due to higher startup costs. Additionally, the new rules are very vague when it comes to classifying digital currency miners.

Virtual currency legislation and the industry as a whole is still in the nascent stages, and these sort of disruption are to be expected, states Poloniex:
“This is a nascent industry; as the regulations around it mature, these types of service disruptions may not be entirely avoidable, but we have been and will continue to be proactive in educating regulators and monitoring both existing laws and upcoming changes to these laws so that we can limit interruptions wherever possible.”

Bloomberg Launches New Forex Trading & Reporting System in the Philippines

Bloomberg Terminal, Image credit: Ifloresc


Bloomberg has launched its new tri-party ticketing system, which now allows interbank foreign exchange dealers and clients in the Philippines to trade and report FX forwards automatically.

The Bankers Association of the Philippines (BAP) - which is made up of 28 financial institutions, Bangko Sentral ng Pilipinas (BSP) and four other interbank dealers - handpicked Bloomberg to oversee the new trading venue.



Under the previous system, FX transactions on the Philippine interbank market had to be manually confirmed and reported to the Bangko Sentral ng Pilipinas, a cumbersome process that impeded price discovery and transparency. Bloomberg’s tri-party ticketing system allows for real-time market data to be accessible by all market participants.

The new facility has received plenty of praise from industry leaders, “Instead of having to manually confirm each trade, I now have complete visibility of trades captured electronically with the necessary confirmations sent to counterparties and relevant trade reporting authorities, which significantly enhances our workflow,” said Marcel Ferreria, Director of FX Swaps at Tradition Financial Services.

Bloomberg’s tri-party system automates the trading process by sending confirmations to both parties of the trade, the dealer, and the BSP. Additionally, the new system feeds into Bloomberg Professional(the terminal).

Grant Coombe, Senior Manager of Global & Asia Pacific Key Accounts for Bloomberg, said:
“The tri-party ticketing system will be an integral tool for the FX community in the Philippines as it allows real-time reporting of trades to all counterparties in an efficient and transparent manner.”
According to figures released in the 2016 Triennial Survey, which is conducted every three years by the Bank for International Settlements, the Philippine peso has a 0.1 percent share of the daily global FX market, which has an average daily turnover of $5.1 trillion.

Wirex Allows its Bitcoin Debit Card Holders to Fund Accounts with Alternative Virtual Currencies (Ethereum, Monero, Litecoin, Dash)



Wirex bitcoin debit card holders will be able fund their cards with alternative currencies traded on Shapeshift.io, an automated digital currency exchange supporting 34 alternative coins, according to yesterday’s announcement.
“Wirex, a mainstream bitcoin debit card, has not only removed the need for a bank account, but their bitcoin debit card can not be funded with Ethereum, Monero, Dash, Litecoin and dozens of other major digital assets within just a few steps through their app.”
The London-based bitcoin debit card issuer made use of the Shapeshift programing application interface (API) to give its users the ability to top up their cards with multiple altcoins.

While bitcoin has gained much traction with online retailers and financial services companies, many of the alternative crypto-currencies have not had the same level of support. And Wirex Co-Founder Pavel Matveev explained that one of the most requested features from existing clients has always been support for alternative digital assets:
“One of the most popular customer requests was to make a multi-asset-friendly debit card and with ShapeShift integration we have finally made this possible.”
The altcoin funding option works by instantly converting incoming deposits to bitcoin in the Wirex mobile app - available on Android and iOS - so the funds on the debit card are still held in bitcoin.



The firm has released several important updates this month. Last week, Wirex upped its card limit per client to six, allowing users to own both a virtual and a physical card for each currency in their account. Previously, users had to choose between plastic and virtual cards due to the 3-card limit.

HolyTransaction is Not Closing Down, Rogue Employee Blamed for Email Snafu



Last week, an email communique from HolyTransaction - an online digital currency wallet provider, which supports multiple digital assets - instructed all clients to withdraw wallet balances by the end of the month as the service would be closing down.

But an official email sent to all HolyTransaction clients yesterday by CEO Francesco Simonetti claims that last week’s closure notice was sent by a disgruntled employee.

Simonetti’s email states:
“That message was the result of a disgruntled system administrator's reaction, but the situation is cleared now. We took action and there will be no further hiccups.”
As a result of the rogue email, the HolyTransaction team has decided to “to rebuild the entire infrastructure from scratch into new machines.” At press time, HolyTransaction services are still down and users are taken to a server maintenance page when attempting to login, which states:
“Our team continues to rebuild the infrastructure in new machines, we would like to assure that customers' funds are safe and about our total commitment to serve the community the best. We will be back online stronger than before. Keep tuned, many new features will be implemented soon.”


FXCM Releases Spreads Report for Major Forex Pairs for 2015



New York-based Forex Capital Markets (FXCM) has released a comprehensive Spreads Report for 2015, detailing average spreads throughout last year on Standard, No Dealing Desk trading accounts.
“The data in this report is derived from real, tradeable spreads available to FXCM clients with Standard accounts from January 1st, 2015 through December 31st, 2015.”
According to figures stated in the report, the average spreads on the EUR/USD, AUD/USD and USD/JPY were 0.3 pips at peak trading hours, with “75% of EUR/USD, 62% of USD/JPY, and 61% of AUD/USD volume” being traded at peak hours.

FXCM considers peak hours to be between 1am to 1pm EST during the week, excluding weekends. During non-peak hours, average spreads on the four major pairs were doubled:
The report also showed the average total cost to open a 1k position on each part through the year:


Indian Renewable Energy Giant Suzlon Loses 900 Million Rupees Due to Forex Costs



Suzlon Energy Ltd., one of the world’s biggest renewable energy companies, released Q1 results for financial year 2016-17 (FY17), which showed the company taking a loss of 2.6 billion rupees, partly due to Forex costs and the new accounting standards (IND AS).

The loss was exacerbated by the fall of the Indian rupee over the last few months, causing Suzlon to loose 900 million rupees in connection with the refinancing of $590 million in debt in April, 2016.

Suzlon CFO Kirti Vagadia, told Bloomberg that new accounting standards forced the company to report the entire 900-million-rupee Forex loss in Q1. Under previous standards, the loss would have been stretched out over the entire maturity of the debt.

The new Indian Accounting Standards essentially reclassified Suzlon’s debt restructuring costs as a liability, instead of a potential liability under previous rules, which added an additional 120 million rupees to the Forex loss, according to Vagadia.

Regardless of the additional FX loss, Suzlon reported a 16.5 billion rupees in revenue for Q1, and CEO J.P.Chalasani said that the future of the renewable energy sector in India is looking very good:
“The country witnessed record renewable energy installations in FY16 and the industry will surpass it by over 30% in the current fiscal. Combined, wind and solar capacity has surpassed hydro capacity and is only next to coal‐based capacity in India.”
The company's report also highlighted the strong support for the renewable energy industry coming from the Indian government, which has set a target of 175 GW of renewables by the year 2022.
“India’s commitment at COP21 to achieve 40% renewables by 2030 will continue to fuel demand for clean energy”
Headquartered in Pune, India, the 8000-employee company currently holds approximately 36% of the entire Indian wind turbine market.

Multi-coin Wallet Provider Holytransaction Shuts Down



Holytransaction S.A., a Luxembourg-based universal digital currency wallet provider with an integrated exchange, instructed all of its clients to withdraw available balances as the company will be ceasing operations by the end of this month.

The firm was launched in 2014 by Andrey Zamovskiy, Francesco Simonetti and Nickolay Babenko with a $25,000 seed funding round. The service was aimed at non-technical consumers, who were looking to dabble in digital currencies but did not want to deal with the intricacies maintaining multiple wallets for different digital assets.

The Holytransaction multi-currency wallet supported Bitcoin, Litecoin, Peercoin, Dogecoin, Dash, Blackcoin, Tether, Omni and science-oriented virtual currency Gridcoin, which was added on September 23, 2015. However, some members reported problems with the service and lack of communication and customer support.

In today’s statement, Holytransaction cites lack of additional investment in the company as one of the principals reasons for the closure:
“We’ve got some investments to keep development of the service. So far our investments are finished and we neither have any significant income neither new round of investments to keep this service running.“


LocalBitcoins Issues Instructions in Russian on Using TOR and VPN to Circumvent Roskomnadzor Blockade



Roskomnadzor, the Russian agency charged with monitoring all communications within the country, has blocked access to LocalBitcoins.com, the largest P2P digital currency marketplace in the world.
“For us, as well as for you, this decision was very unexpected,” said LocalBitcoins.
The ban comes at a time when the popularity of the digital currency within the Russian Federation is surging. Last week, LocalBitcoins weekly volume in Russia set a 9th consecutive record at 237,834,818 Russian rubles ($3,671,748.62). The only other country that comes close to the rapid growth seen in Russia would be Venezuela, which set its 2nd consecutive weekly volume record on LocalBitcoins last week.

Charts from Coin.dance illustrate the rapid growth of LocalBitcoins turnover in Russia:


LocalBitcoins responded by issuing instruction in Russian on their blog on how to use a VPN service (IPVanish, Mullvad, NordVPN) to circumvent the blockade:
“It is not recommended to use a free VPN services, because they can keep track of your traffic that is not safe. If you do not want to pay for VPN services, we recommend that you begin to use the TOR browser (TOR browser) to access the LocalBitcoins.com”
And LocalBitcoins isn’t the first bitcoin-related site to face the wrath of Roskomnadzor. In May of last year, the agency blocked access to Russian news site BitNovosti.com, Btcsec.com and Bitcoin.it. Earlier this year, Roskomnadzor blocked Russians from accessing Bulgarian digital currency exchange BTC-e.

Russian regulators and central bank officials have been battling over virtual currency legislation for several years now. More recently, Russia’s deputy minister of finance Alexei Moiseyev told TASS news agency that a direct ban on bitcoin would not be the right move, adding that consultations with experts will be held to determine the right course of action.

Moiseyev’s comments were interpreted by many in the Bitcoin community as a sign that authorities in Russia were warming up to the technology. However, the abrupt Roskomnadzor ban on LocalBitcoins casts a big shadow over the future of the digital currency industry in the Russian Federation.

Deloitte Launches Its First Bitcoin Teller Machine in Toronto Office

Image credit: Deloitte Touche Tohmatsu (Deloitte Touche Tohmatsu 2007 annual review) [Public domain], via Wikimedia Commons


Deloitte, one of Canada’s leading professional services firms, launched its first Bitcoin ATM (BTM) at one of its offices in Toronto, Canada. Deloitte has been involved heavily in the blockchain & fintech space over the past two years.

In May of this year, the firm established a 50-person blockchain developer lab in Dublin, Ireland. Deloitte also collaborated with BlockCypher, Bloq, ConsenSys Enterprise, Loyyal and Stellar on twenty different blockchain-based prototypes for the financial industry, four of which were unveiled at the Consensus 2016 blockchain conference in New York.

Deloitte has also released several papers on the applications of blockchain technology in financial markets (Blockchain Enigma. Paradox. Opportunity), as well as a report which highlighted Israel’s rise as a global financial technology center.

The firm has mostly focused on private and permissioned blockchain systems, but yesterday’s unveiling of the new Deloitte BTM is a first for the financial services giant.

Several photographs surfaced on Twitter of the new Deloitte BTM. Michael Perklin, President of The CryptoCurrency Certification Consortium, was photographed yesterday operating the new BTM: Two other photos from the Twitter feed of blockchain advocate Hillary Carter, shows Iliana Oris Valiente - co-founder of Rubix, Deloitte’s blockchain application development team - standing next to the Deloitte BTM: Deloitte's BTM was supplied by Canadian manufacturer Bitaccess, which features a large touch screen, allowing users to turn cash into digital currency and vise-versa.

BIS 2016 Survey Shows Global Forex Turnover Dropping for the First Time Since 2001

The Bank for International Settlements in Basel. Photo: Reuters


Figures in the newly released Triennial Survey for 2016 - which is the most comprehensive study of trends and data in the global FX marketplace, conducted by the Bank For International Settlements (BIS) every three years - revealed that daily turnover in the Forex market has dropped for the first time since 2001. The BIS has been keeping track of FX market activity since 1986.

Daily FX volume averaged close to $5.1 trillion in April of 2016. In April of 2013, when the last survey was conducted, global FX volumes were close to $5.4 trillion.

The 2016 survey also revealed the rapid decline in global spot FX transaction volume. During the last survey, daily turnover in spot transactions was $2 trillion, in April of 2016, this figure had dropped to $1.7 trillion per day - a 15% drop.
“This decline in spot trading was the main driver behind the overall fall in global FX turnover compared with 2013.”
However, FX swaps volumes have risen from $2.2 trillion in April of 2013 to $2.4 trillion in April of 2016. Forex swaps are primary used by financial institutions and companies, and the survey highlighted that the 8.3% rise in FX swap turnover came mainly from transactions involving the Japanese yen.

The winners:


The U.S. dollar is still king with $4.458 trillion in daily turnover; $1,387 billion in spot transactions; $600 billion in outright forwards; $2,165 billion in FX swaps; $88 billion in currency swaps; $218 billion in FX options:

Chart source: http://stats.bis.org/statx/srs/table/d11.1


While the dollar represents 88% of all daily FX turnover globally, the United Kingdom retains its crown as the FX trading capital of the world, registering $2.426 trillion in daily volume in the Triennial Survey for 2016. That is almost double the figures for the U.S., which came in at $1.272 trillion per day:

Chart source: http://stats.bis.org/statx/srs/table/d11.1

The Chinese renminbi yuan has also become the 8th most traded currency in the world, with an average daily volume of $202 billion.
“The renminbi doubled its share, to 4%, to become the world’s eighth most actively traded currency and the most actively traded emerging market currency, overtaking the Mexican peso. The rise in the share of renminbi was primarily due to the increase in trading against the US dollar.”
Besides the yuan, the Canadian dollar, British pound, Norwegian krone and Swedish krona have gained share in the global FX market. The recent survey also demonstrated that several emerging market currencies like the Korean won, Indian rupee and Thai baht have jumped several spots on the global FX leaderboard.

The losers:


Figures from the Triennial Survey for 2016 revealed the euro has been losing share in the global FX market in the aftermath European debt crisis in 2010. In fact, the euro’s share has been declining since April of 2010, when the currency had 39% market share. By 2013, that number was down to 33%, and the 2016 figures came in at 31 percent.

While trading in the EUR/SEK and EUR/NOK has increased, turnover in all other euro pairs has slowed down.
“Trading in the four most actively traded euro currency pairs – USD/EUR, EUR/GBP, EUR/JPY and EUR/CHF – fell. USD/EUR average daily turnover declined by $119 billion, while the relative declines were most pronounced for the EUR/JPY and EUR/CHF pairs.”
The Japanese yen’s market share has dropped by 1%, while the Australian dollar and Swiss franc lost 1.7% and 0.4%, respectively.
“Trading in the three most actively traded yen cross rates – USD/JPY, EUR/JPY and JPY/AUD – contracted significantly from 2013 to 2016.”


FXCM Releases New Forex Market Depth Indicator for 17 Currency Pairs

New York-based forex broker FXCM announced today their new Forex Market Depth Indicator, which is exclusively available as of today to clients using the broker’s flagship platform, Trading Station.

Unlike futures contracts and other financial derivatives, where open interest and sentiment data is easily available due to centralizing clearing venues, the currency market is decentralized across the globe and these metrics have been difficult to source in the past.

The new FXCM indicator reveals five levels of liquidity for 17 major currency pairs, however, only standard accounts will be able to make use of the new offering. The Forex Market Depth Indicator pulls data from FXCM’s seventeen liquidity providers:



Currency traders - especially scalpers and short term traders - will benefit greatly from this indicator as they will be able to examine how much volume is available at certain price levels. This kind of detailed information gives traders a much better view of the underlying liquidity conditions of each market.


Drew Niv, CEO of FXCM, said:
“Our team is consistently working to develop new advanced technology and optimize our clients' trading experience.”
Over the past two years, FXCM has released several powerful indicators to give its clients an edge in the FX marketplace. For instance, the Speculative Sentiment Index (SSI) - which was released before the Market Depth Indicator - plots FXCM retail trader positioning in real-time on the charts.

Dollar Shortage Intensifies in Azerbaijan, Multiple Banks in Baku Refuse Forex Transactions

Flame Towers in Baku, Azerbaijan - Image credit: cntraveller.com


Banks, lenders and currency exchange kiosks in Azerbaijan have started restricting foreign currency sales - U.S. dollars in particular - as the Azerbaijani manat continues to lose ground due to fears of further devaluation and declining oil prices.

The manat took a big nosedive on December 20, 2015, when the central bank decided to remove its dollar peg. The Azerbaijani currency dropped close to 32 percent that day to 1.55, and the manat has continued to drop against the dollar thru 2016. The USD/AZN closed today at 1.66436 - an all-time high.
Chart source: XE

The horrible performance of the manat has sent Azerbaijani merchants and investors into foreign currencies en masse, causing a severe dollar shortage in the region. Earlier this year, the central bank tried to fight the shortage by imposing a limit on the amount of dollars banks could sell to their clients on a daily basis, which was set at $500.

But as Reuters reports today, out of six banks interviewed; three banks in the capital city of Baku have suspended foreign currency transaction altogether; three banks only allow $100 a day per client.

The caps have also created a thriving black market, where the USD/AZN trades close to 2.

Some Baku merchants like Akif Shukyurov - who regularly converts his manat denominated revenues to dollars in order to pay his suppliers - tells Reuters that he can’t complete his transactions due to the extreme dollar shortage in the country.

The biggest supplier of dollars in the region is the sovereign wealth fund, Sofaz, which holds auctions twice a week, where $50 million is disbursed to banks. But the demand for dollars towards the end of August was close to $750 million, according to a Marja.az, a financial news outlet in Baku.

Just like the inadequate and ineffective attempts by the Nigerian central bank to remedy the dollar shortage in Nigeria, the policies of the Azerbaijani central bank have also failed, despite multiple interest rate hikes this year.

Financial regulators have attributed the growing demand for dollars to seasonal trends, saying that demand is driven up at the end of the summer as merchants need to make foreign currency payments.

Rufat Abbasov, an aide to the head of the Financial Markets Supervisory Authority, explained to Bloomberg in an interview:
“We were expecting this to happen because economic activity intensifies at the end of summer and the beginning of autumn. This is the time when many companies make payments to their foreign partners.”


Bitcoin Breaks Above $600 for The First Time Since Bitfinex Hack



Bitcoin finally broke above the big resistance at $600 today. The digital currency had not traded near this level since the 11th of August. The market has pulled back somewhat after the initial spike. Bitcoin traded as high as $610.87 today, according to data provided by OKcoin, one of the largest digital currency exchanges in China.

This is the highest bitcoin has been since the beginning of August, following the savage plunge down to $477.98 in the aftermath of the Bitfinex hack, where close to 1% of all bitcoin in existence were stolen. Those coins still haven’t been recovered by authorities, but despite the high profile theft, faith in the digital currency remains strong as the bitcoin network itself remains secure.

Following the Bitfinex theft, bitcoin traded in a sideways channel for the entire month of August, establishing a floor around $565.

The big question now: will the former resistance at $600 now turn into support?


LocalBitcoins, Largest P2P Bitcoin Exchange in the World Cuts Fees For UK Traders by 50% For One Month



LocalBitcoins - the most popular P2P Bitcoin exchange in the world, with 1.35 million members across 249 countries - announced today that Britons will enjoy a 50% discount in trading fees for close to 30 days. The new rates go into effect on Monday and expire on October 2, 2016.

In the official blog post, LocalBitcoins mentioned the pivotal role UK traders played in establishing their trading business:
“The UK helped solidify the future of LocalBitcoins by being the first market to see growth in P2P trading which gave us enough money to hire our first employee.“
LocalBitcoins also recognized the tremendous impact of the Brexit vote on the value of the Pound Sterling, while saying the exchange will be more than happy to assist traders in exchanging their depreciating pounds for bitcoin.
“We remember the support you gave us in our early days, now it's time for us to give back and help you get out of the pound before it's too late.“
UK traders will only pay 0.5% commission on every trade for the duration of the promotion.

Weekly LocalBitcoins volumes in the UK stayed under £1 million for most of 2014-2105. However, weekly volumes for most of 2016 have hoovered above this mark, with volume for last week coming in at £1,463,038, according to data gathered by Coin.dance! While volume has been trending higher this year in the UK, it’s still short of the all-time record of £2,940,575, which was recorded during the last week of November in 2013.


Flag image by wallpapercave.com

CySEC Appoints Liquidator in Bankruptcy of SkyFX and Capital Option

Image credit: philenews.com


The Cyprus Securities and Exchange Commission (CySEC) announced today the appointment of a provisional liquidator for Trademarker Ltd.

Trademarker is the parent company of Forex broker SkyFX and binary options brokerage Capital Option; the websites for both brokers have been taken down.

The problems for Trademarker started in 2015, when the CySEC imposed a €20,000 fine on the company for failing to comply with numerous regulatory requirements, one of which was outsourcing part of the firm’s marketing operations to Israel.

And in February of this year, the CySEC suspended the company's Cyprus Investment Firm (CIF) license for 15 days for multiple violations of various CySEC rules. According to a Finance Magnates report, the CySEC stated that the rule violations were compromising the safety of customer assets.

Per the CySEC announcement, Mr. Andrea Andronikou from Larnaka has been appointed as the Provisional Liquidator and charged with taking “all necessary measures for the return of all the funds, which are located in bank accounts of the Company and / or located in Clients’ Accounts (CLIENT'S ACCOUNT) of the Company, and which belong to the Company's clients.”