FX Traders Flee Offshore, Tether Still Unstable: Best of the Week

IG Group, a British financial derivatives broker, has received regulatory approval from the National Futures Association, the self-regulatory organisation of the US derivatives market. It made its application in October 2017.

The firm intends to open an office in Chicago in the middle of financial year 2019, which means in the next couple of months. It has already hired personnel to staff its new branch, with the post of CEO given to Rupert Osborne, the broker’s former Deputy Head of FX and Futures.

Saxo Bank in the subcontinent

Saxo Bank, the Danish investment bank, has expanded its operation in India, with a new office in Gurugram. The site, which spans 125,000 square feet and employs 500 people, works with the Copenhagen headquarters on IT and operations. It was opened in 2013 with 280 employees.

Saxo Bank employs more than 1,600 employees and is located in 16 countries. Over the next couple of years, the company plans to hire another 200 employees in India.

Interview with Gibraltar’s Minister for Commerce

The Gibraltar Financial Services Commission first assigned a group to work with blockchain technology in 2014, and on the 1st of January 2018 became one of the first countries to legalise the blockchain industry.

Finance Magnates met with Alberto Isola, the British Overseas Territory’s Minister of Commerce, to discuss this decision. “We believe blockchain technology has got a lot of promise…if we can regulate it safely…” he said.

We discussed how exactly the local authorities intend to separate the good firms from the bad, how long this process will take, how many firms are applying, and how many are likely to be accepted. We also talked about Gibraltar’s history with online gaming.

Analysis: FX customers escaping from Europe

Three months have passed since the European Securities Markets Authority, the European Union’s financial regulator, significantly tightened restrictions on foreign exchange brokers. Now these firms report that their business has dropped dramatically.

Some firms are eager to comply with the new regulations, while others are focusing on finding customers elsewhere. They argue that customers want to take big risks with their money, because it gives them the chance to win a lot. The new laws have simply caused them to give their money to unlicensed, offshore companies.

In this analysis, we discuss the real repercussions of the regulator’s effort to protect the trading public.

Analysis: Visa and Mastercard vs offshore brokers

Visa and Mastercard, the world’s two leading credit card companies, have started to block payments to and from unlicensed financial services firms. They now classify such companies in the same category as gambling and binary options companies.

One of the results of this is that customers can claim a refund from these brokers for up to a 18 months after the date of transaction.

In this analysis, Finance Magnates examines this issue and its repercussions.

Analysis: Tether losing value, still raising questions

Tether is a cryptocurrency pegged to the value of the US dollar. The first stablecoin, it has consistently been one of the more popular cryptocurrencies since its inception, despite concerns regarding its lack of transparency and certain business connections.

However, the coin dropped drastically in value last week, and the ability to exchange it for dollars has been suspended for months.

In this analysis, Finance Magnates examines what this price movement could mean, and presents a wide range of opinions from the cryptocurrency community. We found that the same questions keep coming up – was Tether dodgy from the very beginning? Has it really got enough dollars in the bank to back itself up?

Analysis: ICOs and institutions

With hundreds of big-money blockchain-focused investment funds now operational, normal people have now been locked out from investing in initial coin offerings.

Most of these funds, however, have been unsuccessful in turning a profit, and ICOs nowadays have been doing dismally too.

In this analysis, Finance Magnates looks at the changing face of the ICO industry. What do they need to do to attract institutions rather than Joe Public? How should they register themselves, and where? What kind of product is likely to be successful?