Quadriga Clients Won’t Get Help From Regulator on Lost Crypto Millions

Feb 8, 2019

First Read

Hits & Takes
JLN Staff

Three-month LIBOR fell by more than four basis points yesterday — the biggest drop in a decade. How’s that SOFR stuff doing again?~SD

ICE’s 2018 data and listings revenues were $2.6 billion, and trading and clearing net revenues were $2.4 billion, up 2 percent and 14 percent year-over-year, respectively. Exchange data and feeds generated $174 million in Q4, up 9 percent.~JK

Seeking Alpha has a transcript of the Intercontinental Exchange’s Feb. 7 earnings call with CEO Jeff Sprecher on the Q4 2018 Results.~SR
Cboe Global Markets posted a record Q4 and record 2018 with net revenues up 26 percent and up 22 percent respectively. Options led the way with net revenues in Q4 of $44.5 million, up 34 percent, due in part to record volumes from SPX options.~JK

Today’s video with Templum Markets CEO Vince Molinari covers so much ground in four minutes — where else can you get talk of blockchain, CUSIP identifiers and Wall Street’s paper crisis in the late ’60s all in one spot? ~SD

Murphy & McGonigle have issued a report titled “Six Trends Emerge in Murphy & McGonigle’s Newly Published “Blockchain Litigation: 2018 Year in Review Report”.”~JJL

The CFTC is still asking for public help to understand cryptoassets. If you would like to leave a public comment on their website, or view existing comments, click here.~MR

Nodal Exchange set a new daily trading record in #US power futures. 40.1 TWh were traded on 5 February 2019.~JJL

~JB

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The Pathway to Liquidity in Unregistered Securities

JohnLothianNews.com

In the United States last year there were more private unregistered securities issued than public ones. In this video from STAC’s 93rd Annual Midwinter Meeting, Vince Molinari, CEO of Templum Markets, talks about the decline in IPOs, building out market infrastructure to support secondary trading of unregistered securities, the illiquidity discount, and how smart contracts can tie it all together while becoming the ultimate vehicle for structured products.

Watch the video »

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Long, strange trip: How U.S. ethanol reaches China tariff-free
Chris Prentice, A. Ananthalakshmi – Reuters
In June, the High Seas tanker ship loaded up on ethanol in Texas and set off for Asia. Two months later – after a circuitous journey that included a ship-to-ship transfer and a stop in Malaysia – its cargo arrived in China, according to shipping data analyzed by Reuters and interviews with Malaysian and Chinese port officials.At the time, the roundabout route puzzled global ethanol traders and ship brokers, who called it a convoluted and costly way to get U.S. fuel to China.
/jlne.ws/2DhQZvP

*****While it was a long, strange trip, there does not appear to have been much “Truckin” involved.~SD

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NYSE-owner ICE warms to new challenger as profits rise
John McCrank, Bharath ManjeshR – ICE
The New York Stock Exchange will not stand in the way of the creation of a new low-cost challenger recently proposed by some of its biggest clients, the head of NYSE-owner Intercontinental Exchange Inc said on Thursday after his company reported higher-than-expected earnings.
/reut.rs/2MVsmJV

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Thursday’s Top Three
Our top read stories of the day Thursday were led by The Wall Street Journal’s ‘This One Here Is Gonna Kick My Butt’—Farm Belt Bankruptcies Are Soaring. Second was FOW’s GH Financials leaves LME for new markets. Third was Wired’s op/ed piece There’s No Good Reason to Trust Blockchain Technology

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MarketsWiki Stats
142,516,681 pages viewed; 23,403 pages; 216,683 edits
MarketsWiki Statistics

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CryptoMarketsWiki’s Coin of the Week is: Monero (XMR)
Crypto-related hacking attacks against large corporations are on the rise. Researchers and cybersecurity experts have determined that Outlaw, a Romanian hacker group, is responsible for a number of recent “cryptojacking” attacks. In these attacks, hackers used a virus called “Shellbot” to hijack websites or computers owned by businesses in order to mine Monero.
/bit.ly/2DZpEQP

CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

Recently Updated Pages

Recently updated pages include
XBTO Group
QuadrigaCX
Hodler
Ontology (ONT)

CryptoMarketsWiki Stats

948 pages; 8,380 edits
CryptoMarketsWiki Statistics

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Lead Stories

Quadriga Clients Won’t Get Help From Regulator on Lost Crypto Millions
Doug Alexander – Bloomberg
British Columbia agency says it doesn’t oversee the exchange; Royal Canadian Mounted Police not commenting on any probes
The latest twist in the crypto drama that stranded $145 million in assets on Quadriga CX brought more bad news for the investors: British Columbia’s securities regulator said Thursday it doesn’t have jurisdiction over the exchange.
/bloom.bg/2SD80u9

ICE will not fight upstart exchange MEMX, CEO says
Nicole Bullock and Philip Stafford – FT
Intercontinental Exchange, owner of the New York Stock Exchange, will not fight the latest upstart exchange aiming to cut the cost of trading in the world’s largest stock market.
/on.ft.com/2MTO80x

***** That is what surrogates are for.~JJL

NGOs hit out at LME’s cobalt sourcing plans; Groups including Amnesty warn proposals risk overlooking supply chain corruption
Henry Sanderson – FT
Fourteen non-governmental groups, including Amnesty and Global Witness, have criticised proposals by the London Metal Exchange to ensure its metals are sourced responsibly, saying the exchange risks creating a “greenwashing mechanism” that overlooks serious supply chain problems such as corruption.
/on.ft.com/2SBZfjT

Private versus public markets is the battle to watch; Billions have gone into less liquid securities but the risks of private markets are untested
Robin Wigglesworth – FT
There is no shortage of popular bogeymen scaring markets these days, whether leveraged loans or algorithmic traders. But perhaps the least-appreciated dangers are lurking in the shadows, away from the glare of mainstream markets.
/on.ft.com/2SDuBa3

Fiddling while the world simmers; Our temperatures have doubled while our politics has halved
Edward Luce – FT
On Wednesday, the US Congress did something we’d forgotten was possible. It held a hearing about climate change. In fact, it held two. These were the first sessions that the US House of Representatives had devoted to the subject since 2010. Students of politics will recall that was the year when the House shifted to Republican control. Only last month did Democrats regain the gavel. It was a lost decade for congressional action to combat global warming. But it was a boom period for the heating planet itself. During that time, the world experienced nine of the hottest 18 years on record (eight of the other nine were earlier in this century).
/on.ft.com/2SCmaf4

A Solution for the IM Big Bang
Scott O’Malia – ISDA
With everything else going on, it’s tempting to shove something with a September 2020 deadline to the back of the line. That’s not an option when it comes to initial margin (IM) requirements. With over 1,100 small firms expected to come into scope, each needing to put IM documentation and systems in place, an early start on compliance efforts will be critical. Even then, the industry faces a very real capacity challenge. That’s why we’re leveraging our 30-year track record in providing the global standard for legal documentation by launching ISDA Create – IM, a new digital platform that automates the negotiation and execution of IM documents.
/goo.gl/5VUqVZ

LIBOR Reform – What Will Work?
Kurt Dew, Northeastern University – TabbFORUM
Consternation over the question of replacing LIBOR continues. There is no guarantee that any choice of LIBOR replacement currently advanced by bank regulators will ‘work,’ and so far, things have not gone well for the replacement candidates
bit.ly/2DslYFR

The Financial Crisis Put a Chill on Big Bank Deals. That Ended Thursday.
Michael J. de la Merced and Emily Flitter – NY Times
Two banks announced the industry’s biggest merger in a decade on Thursday, signaling bank executives’ growing confidence that the regulatory constraints imposed after the 2008 financial crisis have begun to loosen.
/nyti.ms/2SD9CnH

Why regulators need to worry about non-bank runs; Transformation of the lending landscape since the crisis brings a new set of risks
Ben McLannahan – FT
Craig Reeves knew the banks were in a lot of trouble the day his Dad dropped in to a branch of Northern Rock, shortly before the UK lender became one of the earliest victims of the global financial crisis. People were queueing down the street, waiting to close their accounts. But his father was still offered a big buy-to-let mortgage on a flat in London.
/on.ft.com/2SxdqHa

E*Trade Suit Against Morgan Stanley Centers on Client Data
Barron’s
After exiting the broker recruiting protocol, Morgan Stanley played legal hardball with breakaway advisors, attempting to prevent them from soliciting former clients.
bit.ly/2MTV7GZ

Josh Constine – Techcrunch
It was the Lehman Brothers of blockchain: 850,000 Bitcoin disappeared when cryptocurrency exchange Mt. Gox imploded in 2014 after a series of hacks. The incident cemented the industry’s reputation as frighteningly insecure. Now a controversial crypto celebrity named Brock Pierce is trying to get the Mt. Gox flameout’s 24,000 victims their money back and build a new company from the ashes.
/tcrn.ch/2MTdpb6

Exchanges, OTC and Clearing

Cboe Global Markets Reports Record 2018 Fourth Quarter and Full Year Results; Diluted EPS for the Fourth Quarter and the Year of $1.23 and $3.76, Respectively; Adjusted Diluted EPS1 for the Fourth Quarter of $1.54 and $5.02 for the Year, up 77 Percent and 47 Percent, Respectively
CBOE
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the 2018 fourth quarter and full year.
bit.ly/2SI8sYk

ErisX fills C-Suite spot with former Barclays exec as it eyes the launch of its institutional crypto exchange
Frank Chaparro – The Block Crypto
The C-Suite at ErisX is fully staffed. The institutional-grade exchange announced three new hires Thursday as it prepares for the launch of its spot marketplace for crypto in Q2.
bit.ly/2Dhx00w

ErisX Continues to Secure Talent Ahead of Spot Launch
Business Wire
ErisX today announced the addition of three new staff members including Robert Thrash, Chief Operating Officer, Arnold Connell, Head of Infrastructure and John Denza, Business Development Executive.
bit.ly/2MVGRxn

Cboe Global Markets Begins Rollout of Options on 11 Select Sector Indices Published by S&P
Press Release
Cboe Global Markets, Inc. (Cboe: CBOE ) today began the rollout of options on 11 Select
Sector Indices that comprise a sub-index of the S&P 500 Index, a key U.S. equities benchmark, further expanding Cboe’s suite of products tied to S&P Indices.
bit.ly/2Se3YJg

Options on VSTOXX Futures: Change in Minimum Block Trade Size and Strike Price Interval
Eurex
The Management Board of Eurex Deutschland has decided the following changes for options on VSTOXX Futures (Product ID: OVS2), effective 4 March 2019:
bit.ly/2SDwx2j

Equity Index Highlights – February 2019 edition
Eurex
The January Effect returned, as equity markets staged a broad recovery after December’s rout. All could merely be a relief rally though, as the markets took note of the mixed earnings reports of American bellwether stocks as a possible early indicator for the year ahead.
bit.ly/2Szr7FE

TMX Group Equity Financing Statistics – January 2019
TMX
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for January 2019. TSX welcomed 19 new issuers in January 2019, compared with five in the previous month and 15 in January 2018. The new listings were 18 exchange traded funds and one consumer products & services company. Total financings raised in January 2019 increased 21% from the previous month, but were down 49% compared to January 2018. The total number of financings in January 2019 was 42, compared with 44 the previous month and 63 in January 2018.
bit.ly/2SI2E0C

Explainer: Why Shanghai’s new Nasdaq-style tech board may be a game-changer
Julia Fioretti and Samuel Shen – Reuters
The detailed rules for a Nasdaq-style start-up board in Shanghai have fueled hopes among early-stage companies the new regime could bring about positive changes in China’s stance towards raising equity that investors have been seeking.
/read.bi/2MWKG5a

Fintech

Meet the First AI-Managed Asset-Backed Securities Portfolio
Mary Childs – Barron’s
World, meet the first artificial-intelligence-managed asset-backed-securities portfolio. At the end of last year, asset manager/tech company Pagaya Investments created what it says is the first-ever $100 million consumer-credit ABS fully managed by AI.
bit.ly/2DiVEOb

Citi and HSBC automate FX prime brokerage novation with Capitolis; Capitolis launched its novation platform last year in partnership with major firms including Citi, HSBC, Brevan Howard and BlueCrest.
Hayley McDowell – The Trade
Technology provider Capitolis has onboarded the foreign exchange (FX) prime brokerage businesses at Citi and HSBC to its recently launched platform for streamlined novation and automation.
bit.ly/2SEsEKr

FlexTrade moves EMS to the cloud with AWS; FlexTrade has deployed FlexNOW to the cloud with AWS, making it the industry’s first cloud-based execution management system.
Hayley McDowell – The Trade
FlexTrade’s multi-asset execution management system (EMS) for buy-side traders is now available on the cloud via Amazon Web Services (AWS).
bit.ly/2SC03Fr

OpenFin bolsters ecosystem with MDX Technology market data connectivity; MDX Technology’s multi-vendor data feeds are now available to OpenFin institutional and FinTech clients.
Hayley McDowell – The Trade
Market data services specialist MDX Technology has become the first real-time market data distributor to join the institutional investment ecosystem established by OpenFin.
bit.ly/2SAQ8jv

City watchdog to probe Revolut’s ‘spoof’ takeaway ad campaign; Fintech firm attracts ire of regulators after it admits using falsified data
Claer Barrett – FT
Revolut, one of London’s fastest growing fintech firms, has admitted it fabricated statistics in a high-profile advertising campaign, which has now been referred to the City watchdog.
/on.ft.com/2SDtyXF

A fintech that helps the world’s biggest banks chart data just raised $17.4 million
Dan DeFrancesco – Business Insider
As financial firms look to visualize data in the most digestible way, companies that can facilitate that process continue to become more valuable.
/read.bi/2MXv6WZ

Cryptocurrencies

Crypto Broker Led by Uber and E*Trade Alums Is Going Public
Coindesk
Voyager, a cryptocurrency brokerage startup founded by veterans of Uber and E*Trade, is going public on Canada’s TSX Venture Exchange through a reverse merger valued at $60 million.
A reverse merger occurs when a privately held company acquires the majority of shares in a publicly traded one and the two firms are combined. In this case, New York-based Voyager Digital Holdings acquired UC Resources Ltd., the shell of a mineral exploration company that ceased operations in 2015, in an all-stock deal finalized earlier this week.
bit.ly/2DYMBUg

UK’s Financial Conduct Authority Reports Crypto Fraudsters Are Moving To Social Media
Nicholas Ruggieri – ETH News
The Financial Conduct Authority (FCA), a financial regulatory agency in the UK, issued a warning to investors this week with their report highlighting losses in investment scams suffered in 2018. With cryptocurrency included in the list of most commonly reported scams, the warning states that over EUR197 million (about $223 million) was lost in scam investments in 2018.
bit.ly/2SEuQ4D

Crypto bear market threatens to last as potential token supply weighs
Gertrude Chavez-Dreyfuss – Reuters
Cryptocurrencies may be facing a prolonged bear market.
Companies that issued tokens, or digital currencies, over the last two years through initial coin offerings (ICOs) may have to sell more of these assets to finance their operations. There’s just one problem: There are very few takers.
/reut.rs/2SFrPRy

Left high and dry by a crypto founder’s demise; Conspiracy theories surround QuadrigaCX after customers are shut out of its ‘cold wallets’
Henry Mance – FT
For years, I’ve had one thing in common with most cryptocurrency investors: I know almost nothing about cryptocurrency. I now share something else with users of cryptocurrency trading platform QuadrigaCX: I cannot access any cryptocurrency.
/on.ft.com/2SxoBj9

Fraud Alert: Fake Bakkt Website is Seeking Funds
Arnab Shome – Finance Magnates
Fraudsters are targeting vulnerable investors to invest in fake Bakkt fundraising round, according to a Coindesk report. As per the report, an imposter is sending emails claiming that Bakkt is planning to raise $50 million in a second token sale round. The email was sent from a Gmail address and the contents are written in broken English – a very common thing among the scammers.
/bit.ly/2ROWbg7

Credit Suisse Arm Sees Blockchain Benefits After Fund Distribution Trial
Yogita Khatri – Coindesk
A subsidiary of Swiss multinational investment bank Credit Suisse has completed a blockchain trial for fund transactions. Fundsquare, the fund distribution arm of the Luxembourg Stock Exchange and the project’s technical partner, announced the news on its blog Thursday, saying Credit Suisse Asset Management and Portugal-based bank Banco Best have “successfully processed live end-to-end fund transactions” using blockchain technology.
bit.ly/2MSRdy3

Bithumb Exchange Launches OTC Trading Desk for Digital Assets
Yogita Khatri – Coindesk
South Korean-headquartered cryptocurrency exchange Bithumb has launched a global over-the-counter (OTC) trading desk for digital assets. Announcing the news on Thursday, the firm said that the new Hong Kong-based venture – Ortus – is a “block deal, matchmaking service” for institutional clients. In an OTC deal, two parties trade directly with each other, unlike on an exchange where orders are matched between buyers and sellers.
bit.ly/2MV5nia

Blow To Bitcoin And Crypto As Asset Manager Makes ‘Bubble’ Warning
Billy Bambrough – Forbes
Bitcoin and the cryptocurrency sector struggled over the last year, battling through a bear market that’s been branded a “crypto winter” for its debilitating effect on the burgeoning industry.
bit.ly/2MVWTHF

Winklevoss Ordered to Pay $45K Worth of Charlie Shrem’s Legal Fees
Pete Rizzo – Coindesk
Investors Cameron and Tyler Winklevoss have been ordered to pay back $45,000 in legal fees incurred by entrepreneur Charlie Shrem as part of an ongoing lawsuit that alleges he failed to broker a series of promised cryptocurrency purchases on their behalf. In the order, filed in the U.S. District Court of the Southern District of New York on Thursday, Judge Jed S. Rakoff ruled Shrem should be reimbursed for a prior court ruling that gave the plaintiffs the ability to seize up to $30 million worth of his assets.
bit.ly/2MTKOCB

Stories from Alternative Crypto Sources

Binance moves away from Ethereum as it prepares to launch DEX
Larry Cermak – The Block
/jlne.ws/2GuSlGT

***DEX is a common abbreviation for “decentralized exchange,” a type of digital trading platform that doesn’t facilitate trades through a centralized source like a traditional exchange. Instead, it is regulated through smart contracts. Many crypto experts have theorized that DEX exchanges could solve some of the existing problems, such as hacking attacks. Currently, most DEX exchanges struggle with a lack of liquidity. You can find our CryptoMarketsWiki entry on the subject here. ~MR

Monero-mining Outlaw Shellbot targets Linux servers
Teo Adam Morrel – Coingeek
bit.ly/2UMLBb4

Politics

White House expects to take action on 5G, artificial intelligence soon
Reuters
The White House will take “executive action” in the coming weeks to make sure the United States keeps its research and development advantage in artificial intelligence, advanced manufacturing, quantum computing and next generation wireless networks, known as 5G, a White House official said on Wednesday.
/reut.rs/2DXobdR

Sen. Schatz Plan Would Tax Financial Trades
Laura Davison – Bloomberg
Wall Street would bear the brunt of the latest tax proposal as Democrats jockey for the most progressive tax ideas with the approach of the 2020 elections.
Senator Brian Schatz, a Hawaii Democrat, is working on a plan that would tax financial trades, according to his spokesman, Michael Inacay, who declined to provide details on how, exactly, it would be structured.
/jlne.ws/2Diz6Ns

Sanders and Warren take fund groups to task over palm oil; US senators write to chiefs of BlackRock, JPMorgan and Fidelity over deforestation concerns
Jennifer Thompson – FT
Elizabeth Warren, Bernie Sanders and other US senators have written to investment groups to urge them to disclose how they manage investments exposed to tropical deforestation linked to palm oil.
/on.ft.com/2SAuBrj

Does Jay Powell Have the Stock Market’s Back?; Investors have long expected the Fed to step in when prices plunge. It looks like the current chairman won’t let them down.
Michael P. Regan – Bloomberg
Traders and stock market pundits are talking about a “Powell put,” after Federal Reserve Chairman Jerome Powell presided over a decision in late January to ease off on rate hikes. It’s a callback to the fabled Greenspan put, which was the idea that Fed chief Alan Greenspan in the 1990s and early 2000s would never allow the stock market to fall too far.
/bloom.bg/2SDZzyS

Regulation

In CFTC Action, Court Orders Precious Metals Trader to Pay Penalty and Imposes Trading Ban for Spoofing and Deceptive or Manipulative Scheme
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that Judge Vanessa Bryant of the U.S. District Court for the District of Connecticut issued a Final Judgment and Consent Order on February 5, 2019, against Andre Flotron, a former precious metals trader for UBS AG, requiring him to pay a $100,000 civil monetary penalty for spoofing and engaging in a deceptive or manipulative scheme through his spoofing in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. The Order also imposes a one-year trading and registration ban.
bit.ly/2SEu8V1

SEC Charges Founder of Online Gaming Company Defrauding Investors
SEC
The Securities and Exchange Commission today charged Robert Alexander with fraudulently raising approximately $9 million from more than 50 individuals by selling investments in Kizzang LLC, a purported online gaming business.
bit.ly/2SDpFlo

Getting a Pay Raise? Do This First
FINRA
Expecting something extra in your paycheck soon? You’re not alone.
Employers expect to provide employees with an average raise of 3.1 percent in 2019, according to a recent survey by the advisory firm Willis Towers Watson. If you’re among the employees due for a raise, you might be surprised at just how much even a modest salary bump can improve your financial fortunes.
bit.ly/2SC2lEx

ESAs publish recommendations on changes to the PRIIPs Key Information Document
ESMA
The European Supervisory Authorities (ESAs) today published their final recommendations following a consultation on targeted amendments to the Delegated Regulation covering the rules for the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs).
bit.ly/2SAeFFz

ESMA publishes list of thresholds below which an EU prospectus is not required
ESMA
The European Securities and Markets Authority (ESMA) has published today a document listing the thresholds below which an offer of securities to the public does not need a prospectus in the various Member States of the European Union (EU).
bit.ly/2SzsQL8

Investing and Trading

Market Turbulence Spurs Demand for Fledgling Active ETFs; Passive funds still dominate industry, but a flurry of interest in active segment hints investors’ perceptions are shifting
Asjylyn Loder – WSJ
Rocky markets have been a boon to active managers in exchange-traded funds, an industry long synonymous with the rise of passive investing. ETF managers who handpick stocks and bonds drew a record $27.5 billion in new investor cash last year, while inflows into index-tracking ETFs slowed for the first time since 2013, according to Morningstar. So-called strategic beta funds, a hybrid between active and passive management, likewise had a banner year, garnering $74 billion.
/on.wsj.com/2SBZvzn

Diversification: High Dispersion Beats Low Correlation
Joachim Klement – CFA Institute Enterprising Investor Blog
When advisers talk about diversification their go-to variable is correlation. Finding an asset with low correlation to equities and bonds is a key consideration of every asset allocator and chief investment officer (CIO) of an institution. But correlation is not everything.
/cfa.is/2DlzN8Z

FTSE Russell introduces Market Based Allocation Index Series
Press Release
FTSE Russell, a leading global multi-asset index, data and analytics provider, today introduced the FTSE Market Based Allocation Index Series. The new series initially comprises five indexes designed for use by the US wealth management and financial advisory community and other multi-asset investors, bridging a gap in index coverage for this important and growing market and demonstrating FTSE Russell’s continued expansion of its multi-asset capabilities.
/goo.gl/dzJWfW

The Stock Market Finally Acknowledges Reality; Global slowdown leads financial commentary.
Robert Burgess – Bloomberg
This year’s remarkable surge in global equities sparked optimism that the recovery from the fourth quarter’s steep 13 percent sell-off would be V-shaped. The action on Thursday suggests it’s more likely to look like a W. After surging 8.65 percent since the start of the year, stocks tumbled as much as 1.37 percent as investors could no longer make excuses for the deteriorating economic outlook.
/bloom.bg/2SD7Lzf

Institutions

Guess Who’s Defending Active Bond Funds? Vanguard.
Brian Chappatta – Bloomberg
Quick — what’s the first word you associate with Vanguard Group Inc., the $5.1 trillion investing giant? Perhaps it’s “indexing” or “passive,” referring to some of the asset manager’s largest fund offerings, such as its $577 billion Vanguard Total Stock Market Index Fund or the $154 billion Vanguard Total Bond Market II Index Fund.
John Hollyer, global head of fixed income at Vanguard, would much prefer you use the term “low cost.”
/bloom.bg/2DkE2Sd

Kepler Cheuvreux extends equity research deal with CIBC; Kepler Cheuvreux will distribute CIBC’s equity research to European institutional client base as part of the extended agreement.
Hayley McDowell -The Trade
European equity agency broker Kepler Cheuvreux has extended its equity research distribution agreement with the capital markets business of the Canadian Imperial Bank of Commerce (CIBC).
bit.ly/2SDo7b4

Investors are wrong about both hedge funds and infrastructure; Promises of double-digit returns for decades on real assets cannot be true
John Dizard – FT
I know that professional investors read and pay for this newspaper. They also attend conferences about the risks and opportunities of investible assets, hearing lots of analysis and warnings. Yet what they do as investors seems systematically contrary to the advice and evidence they have in hand.
/on.ft.com/2SA7JrY

$66bn US bank merger ups ante on rivals to consolidate; Deal between BB&T and SunTrust highlights benefits of scale in digital world
Robert Armstrong and Laura Noonan – FT
The biggest US bank deal since the financial crisis will heap pressure on America’s mid-sized lenders to find merger partners, industry executives, investors and analysts say.
/on.ft.com/2SI1lie

Hedge Fund Founder Jeff Tannenbaum’s Next Act Will Be Green; The chairman emeritus of Fir Tree Capital Management is investing his own money through a new firm called Titan Grove.
Brian Eckhouse and Chris Martin – Bloomberg
Jeff Tannenbaum made his fortune through investing; now he’s investing that fortune.
/bloom.bg/2SI0XAi

Regions

Markets Need to Keep an Eye on the Lucky Country
Robert Burgess – Bloomberg
Australia has become known as “The Lucky Country” for having avoided a technical recession since 1991. It even managed to keep growing while the rest of the world suffered through the worst financial crisis since the Great Depression a decade ago. But now its luck may be running out, and the implications are potentially global.
/bloom.bg/2DgsPlB

Wall Street’s Slide Hurts New York; City Loses Nearly $1 Billion in Tax Revenue
Jesse McKinley, William Neuman and Ben Casselman – NY Times
New York City will see a sharp drop in personal income tax collections this year, surprising city officials who now warn of a possible end to the nearly decade-long boom that accompanied Wall Street’s gains.
/nyti.ms/2SxpND9

S&P BSE SENSEX During the Modi Administration’s Budget Sessions
Ved Malla – S&P Dow Jones Indices Indexology Blog
Every year in India, the Finance Minister presents the Union Budget, which is perhaps the most important economic activity in the country. “Budget Day” comes with a lot of expectations, and it therefore has a bearing on the capital markets in both the pre- and post-budget sessions. The days before and after the budget session usually bring volatility to the capital markets.
/jlne.ws/2DeOHO6

Political uncertainty to keep Mexican investors on sidelines
Jude Webber – FT
Institutional investors in Mexico are mostly planning to sit on the sidelines this year, their risk appetite constrained by concerns over the direction of politics under President Andrés Manuel López Obrador, according to a new poll.
/on.ft.com/2SDvaRd

Why Investors Will Still Flock to Negative-Yield Japan Bonds
Chikako Mogi and Kazumi Miura – Bloomberg
Overseas demand will remain robust this year: Sumitomo Mitsui; Short-dated JGBs extremely attractive for foreigners: Daiwa SB
The return of dovish central banks is putting Japan’s negative-yielding government bonds back on the investment menu for global funds.
/bloom.bg/2SIjiO1

Mysterious Turkish Firm Helped Maduro Move $900 Million in Gold
Bloomberg News
Turkey joined Russia, Iran and others in backing Maduro; Erdogan has tried to alleviate U.S. financial pressure
Two months after Venezuelan President Nicolas Maduro visited his counterpart Recep Tayyip Erdogan in Ankara, a mysterious company called Sardes sprang into existence.
/bloom.bg/2SD7dJH

Brexit

Norway proposes legislation to secure rights of citizens if no-deal Brexit
Reuters
Norway’s government proposed legislation on Friday to secure the rights of Norwegians living in Britain and of Britons living in Norway in the case of a no-deal Brexit, the country’s justice ministry said.
/reut.rs/2SC2Oqh

Hello Brexiters, and welcome to your special place in hell
I’m afraid there is a hard border with paradise — and you’ll need euros of course
Robert Shrimsley – FT
Hello there and welcome to hell. I’m afraid the Devil couldn’t be here himself, but I’m his chef de cabinet. You can call me Martin.
/on.ft.com/2SxOpvz

Brexit: Labour plan can get majority, says John McDonnell
BBC News
Labour’s plan for a permanent customs union with the EU after Brexit can secure a Commons majority, the shadow chancellor has told the BBC. John McDonnell said it was a “very traditional British compromise” to avoid a “catastrophic” no-deal Brexit. “We believe that this is a deal that could fly within Parliament,” he said. Jeremy Corbyn’s letter setting out Labour’s demands for supporting a Brexit deal was welcomed by some EU figures and Tory MPs. Downing Street is expected to reply to Mr Corbyn’s letter later on Friday.
/bbc.in/2SInk97

May Heads to Ireland Seeking Border Compromise: Brexit Update
Thomas Penny, Jess Shankleman – Bloomberg
Theresa May heads to Dublin in the latest effort to extract concessions from the European Union that will make her Brexit divorce deal more acceptable to Parliament. A trip to Brussels on Thursday yielded little though both sides agreed to send their negotiators back into talks.
/bloom.bg/2Dn7mr1

MR Preparing for Brexit
ASIC
The United Kingdom (UK) is scheduled to leave the European Union (EU) on 29 March 2019 (‘Brexit’). The terms of the UK’s exit remain subject to on-going negotiation between the UK and EU with a range of outcomes possible.
bit.ly/2MSUJZh

John Lothian Newsletter

So you want to know what’s happening in the financial markets?We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Newsletters

Quadriga Clients Won’t Get Help From Regulator on Lost Crypto Millions

Feb 8, 2019

First Read

Hits & Takes
By JLN StaffOne takeaway from the CME’s second quarter earnings report yesterday: Average daily volume at the exchange through the first half of the year was 20.2 million. In 2000, ADV was just over 2.5 million.~JKB3, formerly BM&F Bovespa, posted a volume increase of 52 percent on 1.3 billion contracts for the first half of 2018. FOW noted that it topped the Intercontinental Exchange‘s volume, moving B3 into third in terms of volume behind top exchange, CME Group up 20 percent with 2.5 billion contracts and the National Stock Exchange of India, up 43 percent to 1.6 billion contracts.~JKDo you know who invented the “Ring The Bell” marketing event at the stock exchange? Equities.com points to a man named Enzo Villani, now a board member of a new crypto markets infrastructure firm called Alt 5 Sigma.~JKHere is a video of Blythe Masters and her CTO about the partnership between Google and Digital Asset from the Google Next ’18.~JJLThis July, NFA partnered with Six Flags Great America to offer staff discounted admission for the month. NFA auditors will be double checking for fake hand stamps and making sure rider harnesses are nice and tight.~JJL~JK++++Global Blockchain Company AlphaPoint Adds Industry Veteran Kristin Boggiano as Chief Legal Officer to Executive Team
AlphaPoint
AlphaPoint, a leading blockchain company focused on enabling institutions to launch, scale, and operate digital asset networks and exchanges all over the world, today announced the appointment of Kristin Boggiano as its Chief Legal Officer. In this role, Boggiano will oversee the company’s legal, regulatory, and government relations functions as well as contribute as a member of AlphaPoint’s executive team.
/jlne.ws/2LrzdNR**Kristin spoke at our MarketsWiki Education event in New York in 2016 about her trek through the jungles of Ecuador.~JK++++Kudlow says US GDP figure will be ‘big’; Top economic adviser says he has no specific knowledge but wanted to ‘help’
Mamta Badkar – FT
US President Trump’s top economic adviser on Thursday told Fox Business that he expected Friday’s US GDP figure to be “big” but denied knowing the specifics, less than two months after Mr Trump’s tweet in advance of a jobs report drew fire.
/jlne.ws/2JZMcR2***** This is irresponsible.~JJL++++Trump Predicts Data Will Show U.S. Economy in ‘Terrific’ Shape
Greg Sullivan and Toluse Olorunnipa – Bloomberg
Bloomberg survey points to 4.2% expansion in second quarter; Data to be released at 8:30 a.m. in Washington on Friday
President Donald Trump predicted data on Friday will show the U.S. economy is in “terrific” shape amid forecasts that growth topped 4 percent in the second quarter, the fastest since 2014.
/jlne.ws/2JXaZFj***** And so is this.~JJL++++Fake news of Napoleon’s death cited in guidance to help traders
Huw Jones – Reuters
Fake news that Napoleon had died is cited in new analysis aimed at helping commodity, bond and forex traders to stop fraud, an industry body said on Friday.
/jlne.ws/2mLvZWr***** Seems fake news, which we once called rumors, has been around a while.~JJL++++The Girl Scouts have gone from baking and sewing to cybersecurity and financial literacy
Myelle Lansat and Richard Feloni – Business Insider
The Girl Scouts is much more than selling cookies; it’s an organization that provides a foundation for young women to take leadership roles in society. And since Sylvia Acevedo was named CEO of Girl Scouts in 2017, it’s also teaching its members about STEM (science, technology, engineering, and math) — shifting the sole focus away from traditionally female tasks, like baking and sewing.
/goo.gl/kwHCjs***** In the name of fairness, some Girl Scout news.~JJL++++Thursday’s Top Three
Yesterday’s top stories were led by Bloomberg’s How Traders Have Changed Since the Massive Selloff Earlier This Year. Second was Equities.com’s From Exchanges Old To Exchanges New: Chicago Mercantile Exchange and Alt 5 Sigma about new crypto trading systems. Third went to Financefeeds’ FCA approves ION-Fidessa deal++++MarketsWiki Stats
130,088,709 pages viewed; 23,215 pages; 214,399 edits
MarketsWiki Statistics++++

Lead Stories

Up to Two-Thirds of Bitcoin Transactions Have No Economic Value
Olga Kharif – Bloomberg
Services developing tools to add clarity to blockchain data; Value of activity about half of what appears, researcher says
On any given day, as much as two-thirds of the transaction activity registered on the Bitcoin network has nothing to do with buying goods and services or trading the virtual currency.
/jlne.ws/2K5LOAMBitcoin Drops as U.S. Rejects Winklevoss ETF for Cboe Trading
Todd White – Bloomberg
Technical indicator also moves into bearish territory; Digital currency has declined after more than 30% July rally
Bitcoin fell for a third day, slipping below $8,000, after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss.
/jlne.ws/2K14LEnFacebook’s $119 Billion One-Day Rout Makes U.S. History
Sophie Caronello – Bloomberg
It’s official. Facebook Inc. just had the biggest stock-market wipeout in American history. Shares tumbled 19 percent on Thursday to close at $176.26 after sales and user growth disappointed investors. The drop translates to a $119.4 billion decline in market capitalization, the largest-ever loss of value in one day for a U.S. traded company.
/jlne.ws/2JWxavvFINRA Announces Enforcement Structure, Senior Leadership Team; Integration of Enforcement Functions Complete; Unified Enforcement Program Key Outcome of FINRA360
FINRA
FINRA announced today the Department of Enforcement’s new structure and senior leadership team. This marks the completion of the final phase of the integration of FINRA’s enforcement functions—a process that began with the July 2017 promotion of Susan Schroeder to FINRA’s Head of Enforcement to create a unified enforcement function.
/jlne.ws/2K02VDGTwitter Shares Plunge 17% as Monthly Users Decline
Selina Wang – Bloomberg
Company reports 1 million fewer visitors from previous quarter; Revenue climbs to $711 million, topping analyst’ projections
Twitter Inc. said monthly users dropped by 1 million in the second quarter, and predicted that number will decline further as the company continues to fight against spam, fake accounts and malicious rhetoric on its social network. The shares plunged 17 percent in early trading.
/jlne.ws/2JWSiBOHedge Fund Titans Who Bet Big on India Now Say They Were Scammed
Olivia Carville, Anto Antony, and Jeanette Rodrigues – Bloomberg
Axon Capital, CIFF say they are victims of a massive fraud; Dispute is playing out in courts in India and Mauritius
The $1.5 billion India wager that went horribly wrong for some of the world’s biggest hedge funds began with a tantalizing offer.
/jlne.ws/2K0v9hOJuncker’s Trade Pitch to Trump: ‘I Can Be Stupid, as Well’; How bravado, flip cards and a White House ally helped European official sell U.S. president on trade detente
Valentina Pop and Vivian Salama – WSJ
When Jean-Claude Juncker arrived at the White House on Wednesday, he had no idea how the meeting with President Donald Trump would end.
/jlne.ws/2K01wNFHigh speed trader Virtu’s profits miss the mark
Nicole Bullock – FT
Virtu Financial, the high speed trader, reported adjusted net income of $59.6m in the second quarter below Wall Street expectations amid a “markedly worse” operating environment, the company said.
/jlne.ws/2LunLRp‘F’ Is For? This ETF Is Named After FANGs and Holds No Facebook
Carolina Wilson and Sarah Frier – Bloomberg
Fund, known by ticker FNG, sold out of Facebook during scandal; Earlier, ETF had dumped Apple holdings ahead of earnings boost. What’s in a name? When hearing the acronym FANG, four technology stocks come to mind: Facebook Inc., Amazon.com. Inc., Netflix Inc., and Alphabet Inc.’s Google.
/jlne.ws/2JXeQ5fSeveral banks dismissed from U.S. metals price-fixing lawsuits
Jonathan Stempel – Reuters
A U.S. judge has dismissed five large banks from two antitrust lawsuits by investors alleging multi-year conspiracies to rig prices for hundreds of billions of dollars of transactions in the global silver and gold markets.
/jlne.ws/2JWBVFnFyre Festival Promoter Pleads Guilty to Ticket-Scam Charges
Bob Van Voris – Bloomberg
Billy McFarland, the architect of the failed 2017 Fyre Festival, pleaded guilty to new charges that he ran a fraudulent ticket business while on bail facing earlier fraud charges connected to the disastrous luxury concert series in the Bahamas.
/jlne.ws/2K0AoOwFannie Mae Debt Sale Sets Milestone For New Borrowing Benchmark; New index taking aim at scandal-ridden Libor passes $6 billion test.
Vipal Monga and Daniel Kruger – WSJ
A benchmark lending rate that regulators and investors hope can replace the scandal-plagued Libor as the foundation for trillions of dollars of debt from credit cards to business loans easily passed a key test.
/jlne.ws/2JYY9GR

Exchanges, OTC and Clearing

CME to launch six gasoline futures contracts
Reuters Staff
CME Group says it plans to launch six gasoline futures contracts effective on Aug. 26 and for trading from Aug. 27
/jlne.ws/2K0xN7eCME Group Achieves International Average Daily Volume of 4.2 Million Contracts in Q2 2018, Up 13 Percent from Q2 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved quarterly international (defined as outside of the US) average daily volume (ADV) of 4.2 million contracts during the second quarter of 2018, up 13 percent over the same period last year.
/jlne.ws/2K07pdJCME profits miss despite bump in trading volumes; Concerns around global protectionism sparked higher trade, particularly in agricultural products
Joe Rennison – FT
CME Group, the world’s largest futures exchange, today reported mixed earnings, tempered by trade concerns fuelling volumes as investors sought to protect against price fluctuations.
/jlne.ws/2K1xgSmCME quarterly earnings boosted by volumes, market data
John McCrank – Reuters
CME Group Inc (CME.O), the world’s largest futures exchange operator, said on Thursday its second-quarter earnings rose on the back of higher trading volumes and market data fees, as it works toward the close of its $5.5 billion acquisition of NEX Group (NXGN.L).
/jlne.ws/2K5ifiuMGEX Reports 25th Best Electronic Volume Day
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports July 25th as the fourth July date on the Daily Electronic Volume’s top 25 records list. Coming in at 19,396 contracts and beating out the previous title holder by 160 contracts, yesterday’s electronic volume now occupies the 25th-best overall spot.
/jlne.ws/2K0yeP4While the ECB holds on to its monetary policy, why not visit the home of the euro yield curve?
Eurex
The European Central Bank has decided to keep its monetary policy unchanged and freeze its benchmark interest rate on the deposit facility at -0.40 per cent. This is again a good opportunity to take a closer look at what Eurex interest rate derivatives have to offer.
/jlne.ws/2LqwSCwExchange Publishes CG Code Consultation Conclusions and Guidance for Boards and Directors
HKEX
Proposed changes to CG Code and related Listing Rules receive strong support; Amendments to CG Code and related Listing Rules to take effect 1 January 2019; Exchange publishes “Guidance for Boards and Directors” to help directors to be more effective
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) conclusions from its consultation on its Corporate Governance Code (CG Code) and related Listing Rules (Consultation Conclusions on Review of the Corporate Governance Code and Related Listing Rules, or Consultation Conclusions)1 along with “Guidance for Boards and Directors”.
/jlne.ws/2LuV7iW

Fintech

FIA Announces Partnership With Rise New York, Created By Barclays, To Promote Innovators Pavilion
Press Release
FIA today announced that Rise New York, created by Barclays, has joined the FIA Innovators Pavilion as a community partner. Rise New York will help FIA promote the Innovators Pavilion, FIA’s annual fintech showcase. Now in its fourth year, the Innovators Pavilion is part of FIA Expo, the world’s largest gathering of professionals in the derivatives markets. This year’s FIA Expo will take place in Chicago on Oct. 16-18.
bit.ly/2vbiG5HGoodbye HipChat: Slack and Atlassian Team Up on Chat Software; Stewart Butterfield’s startup will subsume Atlassian’s corporate chat tools to take on Microsoft.
Dina Bass and Ellen Huet – Bloomberg
Atlassian Corp. is selling its corporate chat software to rival Slack Technologies Inc. and taking a small stake in the startup, as they face greater competition from Microsoft Corp.
/jlne.ws/2JYY3isFortnite Mania Fuels Epic Growth to $8.5 Billion; Epic Games’ profits on the game have made “legendary character” Tim Sweeney a billionaire.
Devon Pendleton, Christopher Palmeri – Bloomberg
Tim Sweeney made Fortnite a phenomenon by doing something that sounds crazy: He gave it away. That strategy has made him a billionaire. In an industry chock-a-block with monster hits, such as Candy Crush and Pokemon Go, Fortnite’s popularity isn’t surprising. Its revenues are. Between the release of the current version in September and the end of May, Fortnite brought in more than $1.2 billion, according to SuperData Research. As of early June, it has been played by 125 million people.
/jlne.ws/2LoVcF5Schroders CEO: fintech is the ‘greatest opportunity we face’
Mark Cobley – Financial News
Peter Harrison, the boss of one of the UK’s largest asset managers, has said innovations in financial technology are the “single biggest opportunity” for his industry right now — as his firm Schroders steps up its efforts to build links with fintech entrepreneurs.
Speaking as the fund manager reported its first-half results on July 26, Harrison told Financial News the “really interesting step-change for our industry will come from technological innovation”. He added: “We are working with 25 or 26 fintechs across the business, across a whole range of different things — I see this as the single biggest opportunity we face.”
bit.ly/2v5pTnECySEC to Establish FinTech Innovation Hub with Focus on Blockchain
David Kimberley – Finance Magnates
Regulatory financial technology (FinTech) initiatives have been springing up across the globe over the past few years. This Friday, the main Cypriot regulator, the Cyprus Securities and Exchange Commission (CySEC), announced that it would also be creating an innovation hub.
bit.ly/2vaVB2ZAlexa, What’s Wall Street Saying About Amazon’s Earnings Beat?
Joe Easton and Jeran Wittenstein – Bloomberg
Shares up 4 percent pre-market amid cloud, advertising boost; Goldman Sachs, others raise price targets for the stock
Amazon.com Inc.’s record second-quarter profit drew a flurry of price target boosts on Wall Street. Analysts say strength in the cloud and advertising business, as well as operational improvements, have positioned the company for long-term growth. The shares rose 4 percent in pre-market trading in New York and are on track to open at a record high.
/jlne.ws/2K1e4nNThomson Reuters unit to be renamed Refinitiv after Blackstone deal
Reuters Staff
Thomson Reuters Corp’s (TRI.TO) Financial and Risk unit, in which U.S. private equity firm Blackstone Group (BX.N) is buying a majority stake, will be renamed Refinitiv once the deal closes, the company said in a statement on Friday.
/jlne.ws/2LptpnM

Cryptocurrencies

The Winklevoss Twins Want To Sell You A Bitcoin Fund; The Winklevoss twins filed a form with the SEC that’s the first step to selling shares in a fund that would track the price of Bitcoin. A look at the next move for the Facebook-suing twins.
Matthew Zeitlin – BuzzFeed News
Tyler and Cameron Winklevoss, impossibly strong-jawed and broad-shouldered rowers, tech entrepreneurs, and famous litigators of Mark Zuckerberg, are now two of the biggest and most famous players in Bitcoin, the cryptographic, digital currency whose wild price gyrations and security issues captivated the business press for a few weeks in March and April of this year. In April, the twins revealed to The New York Times that they owned some $11 million worth of Bitcoin.
/jlne.ws/2K14a5XWinklevoss-Backed Bid for Bitcoin-ETF Rejected by Regulators
Benjamin Bain – Bloomberg
Cryptocurrency declines after SEC announces its decision; Agency raises concern about oversight of Bitcoin’s spot market
Bitcoin fell after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss, showing the regulator remains skeptical that the market for the cryptocurrency is sufficiently free of abuse to bring trading to the masses.
/jlne.ws/2K1syEaBrock Pierce: The Hippie King of Cryptocurrency
Neil Strauss – Rolling Stone
Twenty-six men and women are seated along four folding tables laid end to end in the ballroom of a former Masonic lodge in Old San Juan, Puerto Rico. An eclectic mix, ranging from local charity workers to Silicon Valley investors to cryptocurrency early adopters, they all believe that they’re about to make history. Specifically, they are here to help Brock Pierce – a child actor turned video-game entrepreneur turned crypto titan – give away a billion dollars to charity. Not in a will after his death, but now, in the prime of his life and the peak of his career, at age 37.
/rol.st/2v8YBwBBitcoin $500,000 Creates a Buzz, But Technicals Point to Rally
Olivia Schaber – Bloomberg
Hedge fund manager predicts correction, then massive rally; Directional index shows biggest divergence since last year=
Comments from Morgan Creek Capital Management hedge fund manager Mark Yusko that Bitcoin could reach $500,000 in six years are heartening battered crypto bulls. They may be better served taking a look at some underlying technicals in the meantime.
/jlne.ws/2K5gIJgCrypto Futures Expansion Won’t Happen Soon, CME’s Duffy Says
Brian Louis – Bloomberg
Exchange head reiterates cautious approach to other contracts; Rival Cboe has hinted at wanting to expand crypto derivatives=
CME Group Inc. Chief Executive Officer Terry Duffy said that in his nearly four decades in trading, Bitcoin futures “might have been the most controversial launch of a product” and he reiterated the company’s not in a hurry to list more cryptocurrency-related contracts.
/jlne.ws/2K1Qdo9The World’s Dominant Crypto-Mining Company Wants to Own AI; In a rare interview, Bitmain’s Jihan Wu talks about his plans to take on Nvidia, Intel, and AMD.
Max Chafkin and David Ramli – Bloomberg
Even by the standards of Bitcoin, things are crazy in China. As the boom in cryptocurrencies has become the biggest speculative bubble in recorded history, a single company in Beijing’s Haidian District has been selling the chips that generate as much as 80 percent of the world’s cryptocoins. “We feel lucky,” says Jihan Wu, the co-chief executive of Bitmain Technologies Ltd., which was more or less unknown two years ago and, according to Wu, booked revenue of $3.5 billion in 2017. (On June 4, a Bitmain spokesman said Wu misspoke and the actual figure was $2.5 billion.)
/jlne.ws/2K1LT8jCrypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags
Matthew Leising, Mira Rojanasakul, Demetrios Pogkas and Brandon Kochkodin – Bloomberg
In the traditional world of securities exchanges, it would be akin to defying gravity. But at Kraken, one of the most popular venues for trading cryptocurrencies, a coin called Tether does it again and again.
/jlne.ws/2KjhdViSelf-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Setting Aside Action by
Delegated Authority and Disapproving a Proposed Rule Change, as Modified by Amendments
No. 1 and 2, to List and Trade Shares of the Winklevoss Bitcoin Trust
SEC
/jlne.ws/2K1BbP9As Crypto Meets Prediction Markets, Regulators Take Notice
Matthew Leising – Bloomberg
The next confrontation between government regulators and a blockchain startup appears set to ensnare a prediction market platform that goes by the name Augur.
/jlne.ws/2K0zFNiMike Novogratz’s Crypto Firm Lost $134 Million in the First Quarter
Doug Alexander – Bloomberg
Crypto-focused merchant bank releases first financial results; Quarterly losses led by trading digital assets, investments
Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, posted a $134 million loss in its first quarter, when the value of Bitcoin and other cryptocurrencies plunged.
/jlne.ws/2K0dYwN

Politics

Butina Sought a Secret Kremlin Line to the U.S. A Rockefeller May Have Helped
Polly Mosendz , Greg Farrell , and Ilya Arkhipov – Bloomberg
O’Neill hosted 2017 dinner for prayer-breakfast delegates; A Russian-language guide to Rohrabacher and other guests
A scion of the Rockefeller clan, George D. O’Neill Jr., was one of the U.S. conservatives who allegedly helped Mariia Butina’s efforts to build a secret line of communication back to the Kremlin, judging by details in recent U.S. filings.
/jlne.ws/2JZwAgDMueller Examining Trump’s Tweets in Wide-Ranging Obstruction Inquiry
Michael S. Schmidt and Maggie Haberman – NY Times
For years, President Trump has used Twitter as his go-to public relations weapon, mounting a barrage of attacks on celebrities and then political rivals even after advisers warned he could be creating legal problems for himself.
/jlne.ws/2K07PRfSteve Bannon’s plot for the downfall of old Europe; The next EU parliament elections are a chance to defeat the far-right
FT
As an architect of Donald Trump’s 2016 presidential election victory, Steve Bannon knows a thing or two about unconventional political warfare. Now the godfather of the US alt-right is gearing for combat in Europe. His arena is the campaign for the next European Parliament elections, scheduled for May 23-26 2019. His chosen weapons, as in the US, are set to be the stoking of social tensions, economic nationalism, incitement of public anger at elites, systematic attempts to discredit reasoned argument and the spread of misinformation.
/jlne.ws/2K5jAWy

Regulation

U.S. regulator stands by decision to block Winklevoss bitcoin ETF
Trevor Hunnicutt, Michelle Price – Reuters
The U.S. Securities and Exchange Commission on Thursday stood by a decision blocking an exchange-traded fund that would have tracked bitcoin, citing concerns about market manipulation.
/jlne.ws/2K06iuzFinTech Regulation Bridges Silicon Valley and Washington D.C.
Stephanie MacConnell – Forbes
The FinTech community is closely watching the latest developments within the Consumer Financial Protection Bureau (CFPB). Recently, Kathy Kraninger was nominated as Director of the CFPB and, if confirmed, she will succeed acting Director Mike Mulvaney, who previously attacked the Bureau’s very existence and has worked to change policies and cut budget since taking the helm in November 2017.
/jlne.ws/2JZzO3JThe regulator is looking at platforms and so should you
Taha Lokhandwala – InvestorsChronicle
The Financial Conduct Authority (FCA), the financial services regulator, is investigating whether investment platforms are competitive and work in the interests of investors. It has recently published an interim report on its Investment Platforms Market Study, which has highlighted a number of areas of concern, including the difficulties in switching platforms and the poor rates of interest they offer on cash.
/jlne.ws/2K0xM3kCFTC Chairman Giancarlo To Keynote The West Texas Legislative
CFTC
/jlne.ws/2K1aXMDPodcast: CFTC Talks EP053: MARK YALLOP FMSB Part Two
CFTC
This week on CFTC Talks, we speak with Mark Yallop, chair of the Fixed Income, Currencies and Commodities Markets Standards Board. We cover the enormous cost to the world financial system of bad behavior, how to historically break down market misconduct into 7 categories and why trust is the heart of the financial markets.
/jlne.ws/2K1qLz8Nordic Credit Rating AS registered as Credit Rating Agency
ESMA
The EFTA Surveillance Authority (EFTA SA) has registered today the Nordic Credit Rating AS (NCR) as a credit rating agency under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (the CRA Regulation), as incorporated into the Agreement on the European Economic Area (EEA Agreement). This decision comes into effect on 3 August 2018. NCR is based in Oslo, Norway, with a branch in Stockholm, Sweden. NRC intends to issue corporate ratings.
/jlne.ws/2mMeNQzFCA proposes changes to rules for crowdfunding platforms
FCA
Following a post-implementation review of its crowdfunding rules, the Financial Conduct Authority (FCA) is opening a consultation on new rules for loan-based crowdfunding platforms.
/jlne.ws/2mSFeo5

Investing and Trading

Is the Key to Beating the Market Written in the Stars?; Henry Weingarten invests his clients’ money by charting the movement of heavenly bodies.
Simon van Zuylen-Wood – Bloomberg
It’s 11 a.m. at the Princeton Club in Midtown Manhattan. A number of financial professionals have gathered here for the “AFund June 2018 Natural Resources Investment Symposium.” Our first speaker is HSBC’s chief precious metals analyst, the aptly named James Steel, who promotes gold as a hedge against populist upheaval. After Steel, there are slideshows from several mining companies seeking investors. After that, lunch. A generic networking event, by all appearances.
/jlne.ws/2K1DDVRECB Keeps to Policy Path to End Bond Purchases
Carolynn Look – Bloomberg
Mario Draghi holds media briefing at 2:30 p.m. in Frankfurt; President will be quizzed on economic risks as QE exit nears
The European Central Bank stuck to its plan to end bond purchases as the European Union and U.S. stepped back from a trade war and the currency bloc’s economic expansion remained solid.
/jlne.ws/2K0B2LOU.S. domestic stock funds report more demand than peers abroad: Lipper
James Thorne – Reuters
Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.
/jlne.ws/2K1vfFMWall Street faces up to “bombshell guidance” at Facebook
Jamie Powell
Facebook’s second-quarter results — which prompted the company’s shares to plunge as much as 24 per cent (!!) overnight — was the first time the surveillance-capitalism machine’s revenue growth had missed expectations since 2015.
/jlne.ws/2K5QE0UIt’s All About Social Media Contagion, Not FAANGs: Taking Stock
Arie Shapira – Bloomberg
Stock futures are holding on to their slight gains thanks to Amazon decoupling from most of its FAANG peers, though momentum gets hit from another whiff from a social media bellwether as Twitter plunges ~16% on weak monthly active user numbers.
/jlne.ws/2K5lDKe

Institutions

What Does a Bank Meltdown Cost? Not Much, Actually; Sabadell hasn’t suffered enough from the fiasco at Britain’s TSB.
Edward Evans – Bloomberg
It was a spectacular fiasco, made even worse by the clumsy way in which it was handled. TSB Banking Group Plc’s attempt in April to transfer the records of its 5 million customers to a new IT system left about a million of them unable to access their accounts and vulnerable to fraud. At first, TSB said things were running smoothly. It makes you wonder what their idea of chaos is.
/jlne.ws/2JWQvN6A $14 Billion Fund Manager Feels ‘Vindicated’ by Facebook Plunge
Olivia Carville and Emily Chasan – Bloomberg
John Streur, an investor who sold his fund’s Facebook Inc. holding after the Cambridge Analytica privacy scandal, said he felt “vindicated” watching the social media giant’s free-fall Thursday.
/jlne.ws/2JWSUaAHere’s How ETFs With Biggest Facebook Exposure Traded Today
Elena Popina , Sarah Ponczek , and Carolina Wilson – Bloomberg
A six-week old Communication Services Select Sector SPDR Fund just had its worst day ever. A rout in Facebook Inc. is to blame for that.
/jlne.ws/2K5PBy0UBS to review misconduct policies after rape claim; Woman alleged she was assaulted by a more senior bank employee
Laura Noonan in New York – FT
UBS is reviewing how it handles sexual misconduct allegations after an employee who claimed she was raped by a colleague contacted the head of its investment bank, Andrea Orcel, to complain about how the bank dealt with her case.
/jlne.ws/2JZQGHmUBS Is Cutting Dozens of Staff in Wealth-Management Revamp
Emily Chasan and Sonali Basak – Bloomberg
16.18CHF+0.18+1.16%
UBS Group AG is laying off dozens of staff at its wealth-management division as it revamps the unit’s leadership team, according to people briefed on the matter.
/jlne.ws/2K1BjhwThe $5 Trillion Question: How Did the Firm That Pioneered ETFs Lose Its Lead?; State Street developed a hit investment product 25 years ago. Then more-focused rivals came along with better marketing and lower costs. Now the trust bank is No. 3 in the market it started.
Asjylyn Loder – WSJ
For State Street Corp. STT -0.32% , the company that pioneered the $5 trillion exchange-traded fund industry, it’s been a long way down.
/jlne.ws/2JZIqr5

Regions

Why Is China’s Currency Falling?; Worries about competitive devaluation are almost certainly misplaced.
Christopher Balding – Bloomberg
Since April, the yuan has fallen by almost 8 percent against the U.S. dollar. This has led many analysts and politicians to speculate that China is intentionally trying to devalue its currency to offset the effect of President Donald Trump’s tariffs. It almost certainly isn’t.
/jlne.ws/2K1K2QZHey Buddy, Can You Spare 2 Million for Coffee?
Vivianne Rodrigues – Bloomberg
ONE. MILLION. PERCENT. That’s how high inflation will climb in Venezuela by year’s end, according to the latest forecast by the International Monetary Fund.
/jlne.ws/2JYUKryChina should really start to worry about Trump; As Europe wins a reprieve over trade the portents for Beijing have commensurately darkened
Edward Luce- FT
It was Wednesday so Europe went from being a “foe” of America to a “great friend”. Next Monday might be different. Perhaps Europe will still be in Donald Trump’s good books. The only person who can say for sure is Mr Trump. Even he probably has little idea. But my hunch is that the ceasefire he struck with Jean-Claude Juncker, president of the European Commission, will hold. Mr Trump loves applause and the last-minute trade agreement with Brussels earned a transatlantic ovation. Europe has won a reprieve. The portents for China have commensurately darkened.
/jlne.ws/2K5RWZOMizuho Eyes $11 Trillion Held by Japan’s Rich Elderly
Gareth Allan and Yuki Hagiwara – Bloomberg
Bank began offering tailor-made trusts for wealthy retirees; Also expanding consulting for Japan pension funds, CEO says
Mizuho Financial Group Inc.’s trust banking arm has its sights set on exactly where the wealth is in Japan: the $11 trillion held by the nation’s elderly.
/jlne.ws/2JZS8tiRussia Extends Rate Pause as Risks to Inflation Halt Easing
Olga Tanas and Anna Andrianova – Bloomberg
Benchmark kept at 7.25% for third meeting, in line with survey; Central bank stays just a step short of level deemed ‘neutral’
Russia’s central bank kept interest rates unchanged for a third consecutive meeting and warned that external risks and the highest inflation expectations in almost a year mean monetary easing probably won’t resume until 2019.
/jlne.ws/2K1O0cf

Brexit

U.K.’s Brexit Options Narrow as Perilous Choices Loom for May
Tim Ros , Emma Ross-Thomas, and Jess Shankleman – Bloomberg
Barnier rejects compromise at heart of May’s Brexit strategy; Chances of no-deal exit, another election creep higher
The U.K.’s Brexit options are narrowing, and most of the choices are hazardous for Prime Minister Theresa May.
/jlne.ws/2K0YwR5Major French Tech Company’s CEO Fears Effects of Hard Brexit
Giles Turner and Mark Barton – Bloomberg
Capgemini SE Chief Executive Officer Paul Hermelin is predicting a hard Brexit will cause a knock-on effect to its British clients, potentially weakening demand.
/jlne.ws/2JYXmpn

Miscellaneous

‘Disappeared’ U.S. Records on Detained Migrant Kids Sparks Probe
Erik Larson – Reuters
Claims by a U.S. ethics watchdog that the Department of Homeland Security and other agencies may have lost or destroyed files relating to the separation of migrant children at the border have triggered a government probe into the proper retention of records.
/jlne.ws/2K01vJm*****Unforgivable.~JJL

John Lothian Newsletter

So you want to know what’s happening in the financial markets?We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Newsletters

Quadriga Clients Won’t Get Help From Regulator on Lost Crypto Millions

Feb 8, 2019

First Read

Hits & Takes
By JLN StaffOne takeaway from the CME’s second quarter earnings report yesterday: Average daily volume at the exchange through the first half of the year was 20.2 million. In 2000, ADV was just over 2.5 million.~JKB3, formerly BM&F Bovespa, posted a volume increase of 52 percent on 1.3 billion contracts for the first half of 2018. FOW noted that it topped the Intercontinental Exchange‘s volume, moving B3 into third in terms of volume behind top exchange, CME Group up 20 percent with 2.5 billion contracts and the National Stock Exchange of India, up 43 percent to 1.6 billion contracts.~JKDo you know who invented the “Ring The Bell” marketing event at the stock exchange? Equities.com points to a man named Enzo Villani, now a board member of a new crypto markets infrastructure firm called Alt 5 Sigma.~JKHere is a video of Blythe Masters and her CTO about the partnership between Google and Digital Asset from the Google Next ’18.~JJLThis July, NFA partnered with Six Flags Great America to offer staff discounted admission for the month. NFA auditors will be double checking for fake hand stamps and making sure rider harnesses are nice and tight.~JJL~JK++++Global Blockchain Company AlphaPoint Adds Industry Veteran Kristin Boggiano as Chief Legal Officer to Executive Team
AlphaPoint
AlphaPoint, a leading blockchain company focused on enabling institutions to launch, scale, and operate digital asset networks and exchanges all over the world, today announced the appointment of Kristin Boggiano as its Chief Legal Officer. In this role, Boggiano will oversee the company’s legal, regulatory, and government relations functions as well as contribute as a member of AlphaPoint’s executive team.
/jlne.ws/2LrzdNR**Kristin spoke at our MarketsWiki Education event in New York in 2016 about her trek through the jungles of Ecuador.~JK++++Kudlow says US GDP figure will be ‘big’; Top economic adviser says he has no specific knowledge but wanted to ‘help’
Mamta Badkar – FT
US President Trump’s top economic adviser on Thursday told Fox Business that he expected Friday’s US GDP figure to be “big” but denied knowing the specifics, less than two months after Mr Trump’s tweet in advance of a jobs report drew fire.
/jlne.ws/2JZMcR2***** This is irresponsible.~JJL++++Trump Predicts Data Will Show U.S. Economy in ‘Terrific’ Shape
Greg Sullivan and Toluse Olorunnipa – Bloomberg
Bloomberg survey points to 4.2% expansion in second quarter; Data to be released at 8:30 a.m. in Washington on Friday
President Donald Trump predicted data on Friday will show the U.S. economy is in “terrific” shape amid forecasts that growth topped 4 percent in the second quarter, the fastest since 2014.
/jlne.ws/2JXaZFj***** And so is this.~JJL++++Fake news of Napoleon’s death cited in guidance to help traders
Huw Jones – Reuters
Fake news that Napoleon had died is cited in new analysis aimed at helping commodity, bond and forex traders to stop fraud, an industry body said on Friday.
/jlne.ws/2mLvZWr***** Seems fake news, which we once called rumors, has been around a while.~JJL++++The Girl Scouts have gone from baking and sewing to cybersecurity and financial literacy
Myelle Lansat and Richard Feloni – Business Insider
The Girl Scouts is much more than selling cookies; it’s an organization that provides a foundation for young women to take leadership roles in society. And since Sylvia Acevedo was named CEO of Girl Scouts in 2017, it’s also teaching its members about STEM (science, technology, engineering, and math) — shifting the sole focus away from traditionally female tasks, like baking and sewing.
/goo.gl/kwHCjs***** In the name of fairness, some Girl Scout news.~JJL++++Thursday’s Top Three
Yesterday’s top stories were led by Bloomberg’s How Traders Have Changed Since the Massive Selloff Earlier This Year. Second was Equities.com’s From Exchanges Old To Exchanges New: Chicago Mercantile Exchange and Alt 5 Sigma about new crypto trading systems. Third went to Financefeeds’ FCA approves ION-Fidessa deal++++MarketsWiki Stats
130,088,709 pages viewed; 23,215 pages; 214,399 edits
MarketsWiki Statistics++++

Lead Stories

Up to Two-Thirds of Bitcoin Transactions Have No Economic Value
Olga Kharif – Bloomberg
Services developing tools to add clarity to blockchain data; Value of activity about half of what appears, researcher says
On any given day, as much as two-thirds of the transaction activity registered on the Bitcoin network has nothing to do with buying goods and services or trading the virtual currency.
/jlne.ws/2K5LOAMBitcoin Drops as U.S. Rejects Winklevoss ETF for Cboe Trading
Todd White – Bloomberg
Technical indicator also moves into bearish territory; Digital currency has declined after more than 30% July rally
Bitcoin fell for a third day, slipping below $8,000, after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss.
/jlne.ws/2K14LEnFacebook’s $119 Billion One-Day Rout Makes U.S. History
Sophie Caronello – Bloomberg
It’s official. Facebook Inc. just had the biggest stock-market wipeout in American history. Shares tumbled 19 percent on Thursday to close at $176.26 after sales and user growth disappointed investors. The drop translates to a $119.4 billion decline in market capitalization, the largest-ever loss of value in one day for a U.S. traded company.
/jlne.ws/2JWxavvFINRA Announces Enforcement Structure, Senior Leadership Team; Integration of Enforcement Functions Complete; Unified Enforcement Program Key Outcome of FINRA360
FINRA
FINRA announced today the Department of Enforcement’s new structure and senior leadership team. This marks the completion of the final phase of the integration of FINRA’s enforcement functions—a process that began with the July 2017 promotion of Susan Schroeder to FINRA’s Head of Enforcement to create a unified enforcement function.
/jlne.ws/2K02VDGTwitter Shares Plunge 17% as Monthly Users Decline
Selina Wang – Bloomberg
Company reports 1 million fewer visitors from previous quarter; Revenue climbs to $711 million, topping analyst’ projections
Twitter Inc. said monthly users dropped by 1 million in the second quarter, and predicted that number will decline further as the company continues to fight against spam, fake accounts and malicious rhetoric on its social network. The shares plunged 17 percent in early trading.
/jlne.ws/2JWSiBOHedge Fund Titans Who Bet Big on India Now Say They Were Scammed
Olivia Carville, Anto Antony, and Jeanette Rodrigues – Bloomberg
Axon Capital, CIFF say they are victims of a massive fraud; Dispute is playing out in courts in India and Mauritius
The $1.5 billion India wager that went horribly wrong for some of the world’s biggest hedge funds began with a tantalizing offer.
/jlne.ws/2K0v9hOJuncker’s Trade Pitch to Trump: ‘I Can Be Stupid, as Well’; How bravado, flip cards and a White House ally helped European official sell U.S. president on trade detente
Valentina Pop and Vivian Salama – WSJ
When Jean-Claude Juncker arrived at the White House on Wednesday, he had no idea how the meeting with President Donald Trump would end.
/jlne.ws/2K01wNFHigh speed trader Virtu’s profits miss the mark
Nicole Bullock – FT
Virtu Financial, the high speed trader, reported adjusted net income of $59.6m in the second quarter below Wall Street expectations amid a “markedly worse” operating environment, the company said.
/jlne.ws/2LunLRp‘F’ Is For? This ETF Is Named After FANGs and Holds No Facebook
Carolina Wilson and Sarah Frier – Bloomberg
Fund, known by ticker FNG, sold out of Facebook during scandal; Earlier, ETF had dumped Apple holdings ahead of earnings boost. What’s in a name? When hearing the acronym FANG, four technology stocks come to mind: Facebook Inc., Amazon.com. Inc., Netflix Inc., and Alphabet Inc.’s Google.
/jlne.ws/2JXeQ5fSeveral banks dismissed from U.S. metals price-fixing lawsuits
Jonathan Stempel – Reuters
A U.S. judge has dismissed five large banks from two antitrust lawsuits by investors alleging multi-year conspiracies to rig prices for hundreds of billions of dollars of transactions in the global silver and gold markets.
/jlne.ws/2JWBVFnFyre Festival Promoter Pleads Guilty to Ticket-Scam Charges
Bob Van Voris – Bloomberg
Billy McFarland, the architect of the failed 2017 Fyre Festival, pleaded guilty to new charges that he ran a fraudulent ticket business while on bail facing earlier fraud charges connected to the disastrous luxury concert series in the Bahamas.
/jlne.ws/2K0AoOwFannie Mae Debt Sale Sets Milestone For New Borrowing Benchmark; New index taking aim at scandal-ridden Libor passes $6 billion test.
Vipal Monga and Daniel Kruger – WSJ
A benchmark lending rate that regulators and investors hope can replace the scandal-plagued Libor as the foundation for trillions of dollars of debt from credit cards to business loans easily passed a key test.
/jlne.ws/2JYY9GR

Exchanges, OTC and Clearing

CME to launch six gasoline futures contracts
Reuters Staff
CME Group says it plans to launch six gasoline futures contracts effective on Aug. 26 and for trading from Aug. 27
/jlne.ws/2K0xN7eCME Group Achieves International Average Daily Volume of 4.2 Million Contracts in Q2 2018, Up 13 Percent from Q2 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved quarterly international (defined as outside of the US) average daily volume (ADV) of 4.2 million contracts during the second quarter of 2018, up 13 percent over the same period last year.
/jlne.ws/2K07pdJCME profits miss despite bump in trading volumes; Concerns around global protectionism sparked higher trade, particularly in agricultural products
Joe Rennison – FT
CME Group, the world’s largest futures exchange, today reported mixed earnings, tempered by trade concerns fuelling volumes as investors sought to protect against price fluctuations.
/jlne.ws/2K1xgSmCME quarterly earnings boosted by volumes, market data
John McCrank – Reuters
CME Group Inc (CME.O), the world’s largest futures exchange operator, said on Thursday its second-quarter earnings rose on the back of higher trading volumes and market data fees, as it works toward the close of its $5.5 billion acquisition of NEX Group (NXGN.L).
/jlne.ws/2K5ifiuMGEX Reports 25th Best Electronic Volume Day
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports July 25th as the fourth July date on the Daily Electronic Volume’s top 25 records list. Coming in at 19,396 contracts and beating out the previous title holder by 160 contracts, yesterday’s electronic volume now occupies the 25th-best overall spot.
/jlne.ws/2K0yeP4While the ECB holds on to its monetary policy, why not visit the home of the euro yield curve?
Eurex
The European Central Bank has decided to keep its monetary policy unchanged and freeze its benchmark interest rate on the deposit facility at -0.40 per cent. This is again a good opportunity to take a closer look at what Eurex interest rate derivatives have to offer.
/jlne.ws/2LqwSCwExchange Publishes CG Code Consultation Conclusions and Guidance for Boards and Directors
HKEX
Proposed changes to CG Code and related Listing Rules receive strong support; Amendments to CG Code and related Listing Rules to take effect 1 January 2019; Exchange publishes “Guidance for Boards and Directors” to help directors to be more effective
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) conclusions from its consultation on its Corporate Governance Code (CG Code) and related Listing Rules (Consultation Conclusions on Review of the Corporate Governance Code and Related Listing Rules, or Consultation Conclusions)1 along with “Guidance for Boards and Directors”.
/jlne.ws/2LuV7iW

Fintech

FIA Announces Partnership With Rise New York, Created By Barclays, To Promote Innovators Pavilion
Press Release
FIA today announced that Rise New York, created by Barclays, has joined the FIA Innovators Pavilion as a community partner. Rise New York will help FIA promote the Innovators Pavilion, FIA’s annual fintech showcase. Now in its fourth year, the Innovators Pavilion is part of FIA Expo, the world’s largest gathering of professionals in the derivatives markets. This year’s FIA Expo will take place in Chicago on Oct. 16-18.
bit.ly/2vbiG5HGoodbye HipChat: Slack and Atlassian Team Up on Chat Software; Stewart Butterfield’s startup will subsume Atlassian’s corporate chat tools to take on Microsoft.
Dina Bass and Ellen Huet – Bloomberg
Atlassian Corp. is selling its corporate chat software to rival Slack Technologies Inc. and taking a small stake in the startup, as they face greater competition from Microsoft Corp.
/jlne.ws/2JYY3isFortnite Mania Fuels Epic Growth to $8.5 Billion; Epic Games’ profits on the game have made “legendary character” Tim Sweeney a billionaire.
Devon Pendleton, Christopher Palmeri – Bloomberg
Tim Sweeney made Fortnite a phenomenon by doing something that sounds crazy: He gave it away. That strategy has made him a billionaire. In an industry chock-a-block with monster hits, such as Candy Crush and Pokemon Go, Fortnite’s popularity isn’t surprising. Its revenues are. Between the release of the current version in September and the end of May, Fortnite brought in more than $1.2 billion, according to SuperData Research. As of early June, it has been played by 125 million people.
/jlne.ws/2LoVcF5Schroders CEO: fintech is the ‘greatest opportunity we face’
Mark Cobley – Financial News
Peter Harrison, the boss of one of the UK’s largest asset managers, has said innovations in financial technology are the “single biggest opportunity” for his industry right now — as his firm Schroders steps up its efforts to build links with fintech entrepreneurs.
Speaking as the fund manager reported its first-half results on July 26, Harrison told Financial News the “really interesting step-change for our industry will come from technological innovation”. He added: “We are working with 25 or 26 fintechs across the business, across a whole range of different things — I see this as the single biggest opportunity we face.”
bit.ly/2v5pTnECySEC to Establish FinTech Innovation Hub with Focus on Blockchain
David Kimberley – Finance Magnates
Regulatory financial technology (FinTech) initiatives have been springing up across the globe over the past few years. This Friday, the main Cypriot regulator, the Cyprus Securities and Exchange Commission (CySEC), announced that it would also be creating an innovation hub.
bit.ly/2vaVB2ZAlexa, What’s Wall Street Saying About Amazon’s Earnings Beat?
Joe Easton and Jeran Wittenstein – Bloomberg
Shares up 4 percent pre-market amid cloud, advertising boost; Goldman Sachs, others raise price targets for the stock
Amazon.com Inc.’s record second-quarter profit drew a flurry of price target boosts on Wall Street. Analysts say strength in the cloud and advertising business, as well as operational improvements, have positioned the company for long-term growth. The shares rose 4 percent in pre-market trading in New York and are on track to open at a record high.
/jlne.ws/2K1e4nNThomson Reuters unit to be renamed Refinitiv after Blackstone deal
Reuters Staff
Thomson Reuters Corp’s (TRI.TO) Financial and Risk unit, in which U.S. private equity firm Blackstone Group (BX.N) is buying a majority stake, will be renamed Refinitiv once the deal closes, the company said in a statement on Friday.
/jlne.ws/2LptpnM

Cryptocurrencies

The Winklevoss Twins Want To Sell You A Bitcoin Fund; The Winklevoss twins filed a form with the SEC that’s the first step to selling shares in a fund that would track the price of Bitcoin. A look at the next move for the Facebook-suing twins.
Matthew Zeitlin – BuzzFeed News
Tyler and Cameron Winklevoss, impossibly strong-jawed and broad-shouldered rowers, tech entrepreneurs, and famous litigators of Mark Zuckerberg, are now two of the biggest and most famous players in Bitcoin, the cryptographic, digital currency whose wild price gyrations and security issues captivated the business press for a few weeks in March and April of this year. In April, the twins revealed to The New York Times that they owned some $11 million worth of Bitcoin.
/jlne.ws/2K14a5XWinklevoss-Backed Bid for Bitcoin-ETF Rejected by Regulators
Benjamin Bain – Bloomberg
Cryptocurrency declines after SEC announces its decision; Agency raises concern about oversight of Bitcoin’s spot market
Bitcoin fell after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss, showing the regulator remains skeptical that the market for the cryptocurrency is sufficiently free of abuse to bring trading to the masses.
/jlne.ws/2K1syEaBrock Pierce: The Hippie King of Cryptocurrency
Neil Strauss – Rolling Stone
Twenty-six men and women are seated along four folding tables laid end to end in the ballroom of a former Masonic lodge in Old San Juan, Puerto Rico. An eclectic mix, ranging from local charity workers to Silicon Valley investors to cryptocurrency early adopters, they all believe that they’re about to make history. Specifically, they are here to help Brock Pierce – a child actor turned video-game entrepreneur turned crypto titan – give away a billion dollars to charity. Not in a will after his death, but now, in the prime of his life and the peak of his career, at age 37.
/rol.st/2v8YBwBBitcoin $500,000 Creates a Buzz, But Technicals Point to Rally
Olivia Schaber – Bloomberg
Hedge fund manager predicts correction, then massive rally; Directional index shows biggest divergence since last year=
Comments from Morgan Creek Capital Management hedge fund manager Mark Yusko that Bitcoin could reach $500,000 in six years are heartening battered crypto bulls. They may be better served taking a look at some underlying technicals in the meantime.
/jlne.ws/2K5gIJgCrypto Futures Expansion Won’t Happen Soon, CME’s Duffy Says
Brian Louis – Bloomberg
Exchange head reiterates cautious approach to other contracts; Rival Cboe has hinted at wanting to expand crypto derivatives=
CME Group Inc. Chief Executive Officer Terry Duffy said that in his nearly four decades in trading, Bitcoin futures “might have been the most controversial launch of a product” and he reiterated the company’s not in a hurry to list more cryptocurrency-related contracts.
/jlne.ws/2K1Qdo9The World’s Dominant Crypto-Mining Company Wants to Own AI; In a rare interview, Bitmain’s Jihan Wu talks about his plans to take on Nvidia, Intel, and AMD.
Max Chafkin and David Ramli – Bloomberg
Even by the standards of Bitcoin, things are crazy in China. As the boom in cryptocurrencies has become the biggest speculative bubble in recorded history, a single company in Beijing’s Haidian District has been selling the chips that generate as much as 80 percent of the world’s cryptocoins. “We feel lucky,” says Jihan Wu, the co-chief executive of Bitmain Technologies Ltd., which was more or less unknown two years ago and, according to Wu, booked revenue of $3.5 billion in 2017. (On June 4, a Bitmain spokesman said Wu misspoke and the actual figure was $2.5 billion.)
/jlne.ws/2K1LT8jCrypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags
Matthew Leising, Mira Rojanasakul, Demetrios Pogkas and Brandon Kochkodin – Bloomberg
In the traditional world of securities exchanges, it would be akin to defying gravity. But at Kraken, one of the most popular venues for trading cryptocurrencies, a coin called Tether does it again and again.
/jlne.ws/2KjhdViSelf-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Setting Aside Action by
Delegated Authority and Disapproving a Proposed Rule Change, as Modified by Amendments
No. 1 and 2, to List and Trade Shares of the Winklevoss Bitcoin Trust
SEC
/jlne.ws/2K1BbP9As Crypto Meets Prediction Markets, Regulators Take Notice
Matthew Leising – Bloomberg
The next confrontation between government regulators and a blockchain startup appears set to ensnare a prediction market platform that goes by the name Augur.
/jlne.ws/2K0zFNiMike Novogratz’s Crypto Firm Lost $134 Million in the First Quarter
Doug Alexander – Bloomberg
Crypto-focused merchant bank releases first financial results; Quarterly losses led by trading digital assets, investments
Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, posted a $134 million loss in its first quarter, when the value of Bitcoin and other cryptocurrencies plunged.
/jlne.ws/2K0dYwN

Politics

Butina Sought a Secret Kremlin Line to the U.S. A Rockefeller May Have Helped
Polly Mosendz , Greg Farrell , and Ilya Arkhipov – Bloomberg
O’Neill hosted 2017 dinner for prayer-breakfast delegates; A Russian-language guide to Rohrabacher and other guests
A scion of the Rockefeller clan, George D. O’Neill Jr., was one of the U.S. conservatives who allegedly helped Mariia Butina’s efforts to build a secret line of communication back to the Kremlin, judging by details in recent U.S. filings.
/jlne.ws/2JZwAgDMueller Examining Trump’s Tweets in Wide-Ranging Obstruction Inquiry
Michael S. Schmidt and Maggie Haberman – NY Times
For years, President Trump has used Twitter as his go-to public relations weapon, mounting a barrage of attacks on celebrities and then political rivals even after advisers warned he could be creating legal problems for himself.
/jlne.ws/2K07PRfSteve Bannon’s plot for the downfall of old Europe; The next EU parliament elections are a chance to defeat the far-right
FT
As an architect of Donald Trump’s 2016 presidential election victory, Steve Bannon knows a thing or two about unconventional political warfare. Now the godfather of the US alt-right is gearing for combat in Europe. His arena is the campaign for the next European Parliament elections, scheduled for May 23-26 2019. His chosen weapons, as in the US, are set to be the stoking of social tensions, economic nationalism, incitement of public anger at elites, systematic attempts to discredit reasoned argument and the spread of misinformation.
/jlne.ws/2K5jAWy

Regulation

U.S. regulator stands by decision to block Winklevoss bitcoin ETF
Trevor Hunnicutt, Michelle Price – Reuters
The U.S. Securities and Exchange Commission on Thursday stood by a decision blocking an exchange-traded fund that would have tracked bitcoin, citing concerns about market manipulation.
/jlne.ws/2K06iuzFinTech Regulation Bridges Silicon Valley and Washington D.C.
Stephanie MacConnell – Forbes
The FinTech community is closely watching the latest developments within the Consumer Financial Protection Bureau (CFPB). Recently, Kathy Kraninger was nominated as Director of the CFPB and, if confirmed, she will succeed acting Director Mike Mulvaney, who previously attacked the Bureau’s very existence and has worked to change policies and cut budget since taking the helm in November 2017.
/jlne.ws/2JZzO3JThe regulator is looking at platforms and so should you
Taha Lokhandwala – InvestorsChronicle
The Financial Conduct Authority (FCA), the financial services regulator, is investigating whether investment platforms are competitive and work in the interests of investors. It has recently published an interim report on its Investment Platforms Market Study, which has highlighted a number of areas of concern, including the difficulties in switching platforms and the poor rates of interest they offer on cash.
/jlne.ws/2K0xM3kCFTC Chairman Giancarlo To Keynote The West Texas Legislative
CFTC
/jlne.ws/2K1aXMDPodcast: CFTC Talks EP053: MARK YALLOP FMSB Part Two
CFTC
This week on CFTC Talks, we speak with Mark Yallop, chair of the Fixed Income, Currencies and Commodities Markets Standards Board. We cover the enormous cost to the world financial system of bad behavior, how to historically break down market misconduct into 7 categories and why trust is the heart of the financial markets.
/jlne.ws/2K1qLz8Nordic Credit Rating AS registered as Credit Rating Agency
ESMA
The EFTA Surveillance Authority (EFTA SA) has registered today the Nordic Credit Rating AS (NCR) as a credit rating agency under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (the CRA Regulation), as incorporated into the Agreement on the European Economic Area (EEA Agreement). This decision comes into effect on 3 August 2018. NCR is based in Oslo, Norway, with a branch in Stockholm, Sweden. NRC intends to issue corporate ratings.
/jlne.ws/2mMeNQzFCA proposes changes to rules for crowdfunding platforms
FCA
Following a post-implementation review of its crowdfunding rules, the Financial Conduct Authority (FCA) is opening a consultation on new rules for loan-based crowdfunding platforms.
/jlne.ws/2mSFeo5

Investing and Trading

Is the Key to Beating the Market Written in the Stars?; Henry Weingarten invests his clients’ money by charting the movement of heavenly bodies.
Simon van Zuylen-Wood – Bloomberg
It’s 11 a.m. at the Princeton Club in Midtown Manhattan. A number of financial professionals have gathered here for the “AFund June 2018 Natural Resources Investment Symposium.” Our first speaker is HSBC’s chief precious metals analyst, the aptly named James Steel, who promotes gold as a hedge against populist upheaval. After Steel, there are slideshows from several mining companies seeking investors. After that, lunch. A generic networking event, by all appearances.
/jlne.ws/2K1DDVRECB Keeps to Policy Path to End Bond Purchases
Carolynn Look – Bloomberg
Mario Draghi holds media briefing at 2:30 p.m. in Frankfurt; President will be quizzed on economic risks as QE exit nears
The European Central Bank stuck to its plan to end bond purchases as the European Union and U.S. stepped back from a trade war and the currency bloc’s economic expansion remained solid.
/jlne.ws/2K0B2LOU.S. domestic stock funds report more demand than peers abroad: Lipper
James Thorne – Reuters
Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.
/jlne.ws/2K1vfFMWall Street faces up to “bombshell guidance” at Facebook
Jamie Powell
Facebook’s second-quarter results — which prompted the company’s shares to plunge as much as 24 per cent (!!) overnight — was the first time the surveillance-capitalism machine’s revenue growth had missed expectations since 2015.
/jlne.ws/2K5QE0UIt’s All About Social Media Contagion, Not FAANGs: Taking Stock
Arie Shapira – Bloomberg
Stock futures are holding on to their slight gains thanks to Amazon decoupling from most of its FAANG peers, though momentum gets hit from another whiff from a social media bellwether as Twitter plunges ~16% on weak monthly active user numbers.
/jlne.ws/2K5lDKe

Institutions

What Does a Bank Meltdown Cost? Not Much, Actually; Sabadell hasn’t suffered enough from the fiasco at Britain’s TSB.
Edward Evans – Bloomberg
It was a spectacular fiasco, made even worse by the clumsy way in which it was handled. TSB Banking Group Plc’s attempt in April to transfer the records of its 5 million customers to a new IT system left about a million of them unable to access their accounts and vulnerable to fraud. At first, TSB said things were running smoothly. It makes you wonder what their idea of chaos is.
/jlne.ws/2JWQvN6A $14 Billion Fund Manager Feels ‘Vindicated’ by Facebook Plunge
Olivia Carville and Emily Chasan – Bloomberg
John Streur, an investor who sold his fund’s Facebook Inc. holding after the Cambridge Analytica privacy scandal, said he felt “vindicated” watching the social media giant’s free-fall Thursday.
/jlne.ws/2JWSUaAHere’s How ETFs With Biggest Facebook Exposure Traded Today
Elena Popina , Sarah Ponczek , and Carolina Wilson – Bloomberg
A six-week old Communication Services Select Sector SPDR Fund just had its worst day ever. A rout in Facebook Inc. is to blame for that.
/jlne.ws/2K5PBy0UBS to review misconduct policies after rape claim; Woman alleged she was assaulted by a more senior bank employee
Laura Noonan in New York – FT
UBS is reviewing how it handles sexual misconduct allegations after an employee who claimed she was raped by a colleague contacted the head of its investment bank, Andrea Orcel, to complain about how the bank dealt with her case.
/jlne.ws/2JZQGHmUBS Is Cutting Dozens of Staff in Wealth-Management Revamp
Emily Chasan and Sonali Basak – Bloomberg
16.18CHF+0.18+1.16%
UBS Group AG is laying off dozens of staff at its wealth-management division as it revamps the unit’s leadership team, according to people briefed on the matter.
/jlne.ws/2K1BjhwThe $5 Trillion Question: How Did the Firm That Pioneered ETFs Lose Its Lead?; State Street developed a hit investment product 25 years ago. Then more-focused rivals came along with better marketing and lower costs. Now the trust bank is No. 3 in the market it started.
Asjylyn Loder – WSJ
For State Street Corp. STT -0.32% , the company that pioneered the $5 trillion exchange-traded fund industry, it’s been a long way down.
/jlne.ws/2JZIqr5

Regions

Why Is China’s Currency Falling?; Worries about competitive devaluation are almost certainly misplaced.
Christopher Balding – Bloomberg
Since April, the yuan has fallen by almost 8 percent against the U.S. dollar. This has led many analysts and politicians to speculate that China is intentionally trying to devalue its currency to offset the effect of President Donald Trump’s tariffs. It almost certainly isn’t.
/jlne.ws/2K1K2QZHey Buddy, Can You Spare 2 Million for Coffee?
Vivianne Rodrigues – Bloomberg
ONE. MILLION. PERCENT. That’s how high inflation will climb in Venezuela by year’s end, according to the latest forecast by the International Monetary Fund.
/jlne.ws/2JYUKryChina should really start to worry about Trump; As Europe wins a reprieve over trade the portents for Beijing have commensurately darkened
Edward Luce- FT
It was Wednesday so Europe went from being a “foe” of America to a “great friend”. Next Monday might be different. Perhaps Europe will still be in Donald Trump’s good books. The only person who can say for sure is Mr Trump. Even he probably has little idea. But my hunch is that the ceasefire he struck with Jean-Claude Juncker, president of the European Commission, will hold. Mr Trump loves applause and the last-minute trade agreement with Brussels earned a transatlantic ovation. Europe has won a reprieve. The portents for China have commensurately darkened.
/jlne.ws/2K5RWZOMizuho Eyes $11 Trillion Held by Japan’s Rich Elderly
Gareth Allan and Yuki Hagiwara – Bloomberg
Bank began offering tailor-made trusts for wealthy retirees; Also expanding consulting for Japan pension funds, CEO says
Mizuho Financial Group Inc.’s trust banking arm has its sights set on exactly where the wealth is in Japan: the $11 trillion held by the nation’s elderly.
/jlne.ws/2JZS8tiRussia Extends Rate Pause as Risks to Inflation Halt Easing
Olga Tanas and Anna Andrianova – Bloomberg
Benchmark kept at 7.25% for third meeting, in line with survey; Central bank stays just a step short of level deemed ‘neutral’
Russia’s central bank kept interest rates unchanged for a third consecutive meeting and warned that external risks and the highest inflation expectations in almost a year mean monetary easing probably won’t resume until 2019.
/jlne.ws/2K1O0cf

Brexit

U.K.’s Brexit Options Narrow as Perilous Choices Loom for May
Tim Ros , Emma Ross-Thomas, and Jess Shankleman – Bloomberg
Barnier rejects compromise at heart of May’s Brexit strategy; Chances of no-deal exit, another election creep higher
The U.K.’s Brexit options are narrowing, and most of the choices are hazardous for Prime Minister Theresa May.
/jlne.ws/2K0YwR5Major French Tech Company’s CEO Fears Effects of Hard Brexit
Giles Turner and Mark Barton – Bloomberg
Capgemini SE Chief Executive Officer Paul Hermelin is predicting a hard Brexit will cause a knock-on effect to its British clients, potentially weakening demand.
/jlne.ws/2JYXmpn

Miscellaneous

‘Disappeared’ U.S. Records on Detained Migrant Kids Sparks Probe
Erik Larson – Reuters
Claims by a U.S. ethics watchdog that the Department of Homeland Security and other agencies may have lost or destroyed files relating to the separation of migrant children at the border have triggered a government probe into the proper retention of records.
/jlne.ws/2K01vJm*****Unforgivable.~JJL

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