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Fintech CEO: BitMEX Exec’s Surrender Won’t Be Last, as Chickens Come Home to Roost

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Recent reports note BitMEX co-founder Benjamin Delo has surrendered to authorities after he was charged with helping the company evade AML regulations.

Delo pleaded not guilty and was released on bail. The exchange allowed users to leverage up to 10000% their BTC position, making it popular among speculators.

“What we’re seeing here with BitMEX… it won’t be the last exchange to get hit with AML & KYC violations. Part of that is because some operators intentionally flout the laws. Another part can be traced to technological implementation,” noted Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“Many of these exchanges were created using technologies that are antiquated or not well designed for the rigors of regulation. Instead of investing in the proper tools and legal advice to stay well ahead of the law, many exchanges decided to shoestring it, buy inferior technology, and move ahead without fully understanding the risk. Now, those chickens are coming home to roost.”

“During the bull run on cryptocurrency several years back, new operators were itching to get into the game fast. They didn’t have the time to develop their own technology, and they didn’t have the money to pay for quality exchange software that had been tried and true for decades. So, they bought into new white-label software providers that didn’t have any experience building exchanges. Without experience in the space, they never really considered what would happen once regulators caught up with the innovation, and their clients didn’t know enough to ask,” noted Gardner.

“Cryptocurrency exchanges are so complex because they’re regulated so differently across the globe. Planning to be compliant in one country isn’t enough to make you compliant in the next. We’ve always designed software to be compliant in the most restrictive jurisdictions, as well as plan for where they will be in five years’ time. That’s not always possible, as regulators can be reactionary in implementation, but it is the goal. The lowest hanging compliance fruit is being on top of AML & KYL regulations. Exchanges can use geofencing to help ensure compliance. When you’ve decided that you’re going to invest in compliance, there are so many tools available to make sure it is done correctly, so that you don’t end up like the BitMEX co-founders,” explained Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Several years back, the company launched the Modulus Market Surveillance & Risk Management System, which provides clients with actionable alerts identifying market manipulation, abusive trading behavior, and money laundering to ensure adherence to regulatory guidelines and rules that govern trading conduct.

“We, at Modulus, have always been intent on limiting client risk, and that starts with ensuring their technology stack is compliant with the latest rules and regulations. So many crypto-preneurs see compliance as a cost, but, in truth, it can be the difference between operating profitably and not operating at all,” noted Gardner.

Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Bitcoin

Bitcoin Price Shoots Past $60K, Ether Hits New All-Time High in Early Saturday Trading

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Bitcoin’s price neared its all-time high of $61,712 early Saturday while ether (ETH, -0.26%) set a new all-time high at $2,190.

According to CoinDesk’s Bitcoin price page, the leading cryptocurrency traded above $60,000 for the first time in nearly a month after spending weeks vacillating between $52,000 and the upper $50,000s. Bitcoin pulled back marginally after peaking around $60,900, though it remains above the psychological marker as of press time.

Bitcoin last hit an all-time high in mid-March, according to CoinGecko.

Meanwhile ether, the second-largest cryptocurrency by market cap, came close to $2,200, just days after breaching $2,100 for the first time.

While it’s unclear if there’s a causation, the price action comes just days before leading U.S. exchange Coinbase begins trading on Nasdaq in one of the crypto industry’s most anticipated events. A sign of the maturing market, the listing will likely give Wall Street traders their most accessible bet yet on growth in the space.

Some institutional investors have wasted little time. Friday, Daniel Loeb, CEO of $17 billion hedge fund Third Point revealed he was a hodler in response to a CoinDesk report. He’s hardly alone: institutional funds have flooded the markets and have been deemed at least partly responsible for the 2020-2021 rally.

Bitcoin bulls were further bolstered on Friday by the idea that an exchange-traded fund (ETF) with exposure to the digital asset space might be approved in 2021, after the Securities and Exchange Commission (SEC) confirmed it was reviewing ETF giant WisdomTree’s application.

The regulator previously began reviewing VanEck’s ETF application last month, and another six companies have filed initial registration forms declaring their own efforts to launch a regulated bitcoin (BTC, -0.99%) investment vehicle.

The broader digital asset space has seen tremendous froth over the past few months, with investors and industry participants trading heavily in decentralized finance tools, non-fungible tokens and altcoins like doge, which hit a peak of $0.08 in February, eight times its value a month earlier.

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Cardano’s Coming of Age – Will it Hit Bitcoin and Ethereum?

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Cardano’s recent full decentralization will fuel its appeal and price, better positioning it to take on rivals Bitcoin and Ethereum in the booming cryptocurrency market, predicts the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The bold prediction from deVere Group CEO and founder Nigel Green comes as Cardano (ADA) last week became a fully-fledged community-run network.

Mr Green says: “The price of Cardano has exploded over the last few months – up around 600% since the beginning of the year, recently making it the third largest cryptocurrency by market capitalisation after Bitcoin and Ethereum.

“But now Cardano has come of age by becoming fully decentralized – meaning its parent company has handed control of the blockchain over to the community – we can expect it to attract more investors which will, of course, drive its price on an upward trajectory.”

He continues: “This milestone will help Cardano better position itself to challenge major rivals in the cryptoverse.

“Cardano is likely to be a challenger to Ethereum as not only can it be used as currency, but its blockchain – the tech on which it runs – can also be used to build smart contracts, protocols and decentralised applications. Plus, it is said to be significantly more scalable than Ethereum.”

Mr Green goes on to say: “It will also pose a challenge to the all-mighty Bitcoin.  This is because those who invest in digital assets already or are planning to do so, know that one of the secrets of successful investing is diversification.

“Therefore, these investors will want their cryptocurrencies diversified too and this is ultimately likely to eat into Bitcoin’s market share.”

Earlier this year Cardano (ADA) was added to deVere Crypto, the cryptocurrency exchange app, to join other major digital currencies including Bitcoin, Ethereum, Dash, Bitcoin Cash, XRP and Dogecoin.

At the time, Nigel Green noted: “The addition underscores our commitment to continually reviewing and expanding our cryptocurrency offering in order to give users of the exchange access to the opportunities and rewards of digital currencies.”

The deVere CEO concludes: “This landmark moment in Cardano’s development journey will further galvanise its position as a rising star in the crypto market.

“I wouldn’t be surprised if some celebrity investors soon publicly express their support on social media for Cardano as they have recently done with other cryptocurrencies.”

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XRP Surges With Ethereum, Gains 32.14 Percent in 24 Hours

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XRP, the cryptocurrency of Ripple, gained 32.14 percent in the last 24 hours despite the ongoing lawsuit.

The sixth most ranked coin rose with the surge in demand for Ethereum after ether, Ethereum blockchain’s token set a new all-time record at $2,151.25 a coin.

XRP rose by 32.14 percent to $0.886998 without specific reasons for the renewed interest in the embattled coin besides surged in Ethereum value.

“We’re not seeing anything specific to XRP and the move feels more like an altcoin season type move given outperformance in other tokens as well,” Joel Kruger, currency strategist at LMAX Digital, stated. Names like TRON and siacoin “are performing even better than XRP on this more thinly traded Easter holiday Monday.

However, Pankaj Balani, Delta Exchange CEO said the XRP prospects look going by the inverse head and shoulder pattern.

XRP has formed an inverse ‘head and shoulder’ pattern with head at 20 cents and shoulders at 40 cents, and neckline resistance passing through 70 cents.

Balani, therefore, sees XRP hitting $1.00 a coin and $1.30 on a breakout above the neckline resistance.

The pattern has formed over the six months; therefore, in case of a breakout, the bullish move is expected to be quick and sustainable,” Balani said in a WhatsApp chat, adding that volatility is likely to remain high due to the SEC lawsuit.

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