The implosion of FTX serves as a stark reminder of the inherent risks within the cryptocurrency and financial landscapes. While there are consequences for Bankman-Fried and most customers will receive their funds, the experience leaves a lasting impact. It’s a wake-up call for vigilance, not just in the crypto space, but within all aspects of FX trading.
FTX’s demise wasn’t a sudden event, but a culmination of poor governance, lack of transparency, and a disregard for risk management. The repercussions underscore the need for continuous monitoring and robust regulatory frameworks. Now, more than ever, it’s essential to ensure all aspects of a broker’s, bank’s, or firm’s operations are meticulously tracked and audited.
This heightened scrutiny will likely lead to more stringent regulations and enhanced trade surveillance systems across both FX and crypto platforms. FX traders should expect increased scrutiny of their trading activities, more demanding Know Your Customer (KYC) and anti-money laundering (AML) requirements, and potentially stricter reporting standards.
North America Updates
The Scila team had a busy spring this year – attending several industry events – and sponsoring/exhibiting at two:
At the FIA Legal & Compliance (April 24th & 25th) conference in the Washington DC area for the second time – there were detailed discussions on the subject of ensuring compliance and using the right tools the right way, at the same time keeping an eye on the business’ needs. While behavioural risk is a continuing theme at FIA L&C, as well as at the XLoD Global New York conference (June 11th – organised by 1LoD (https://www.1lod.com/xlod-global-ny) ), financial risk is starting to move into the picture more and more with each discussion point.
Scila attended two other events – the 2024 Options Industry Conference (OIC (https://www.optionsconference.com/agenda) ) at Asheville North Carolina – an event fairly heavily focused on (yes, obviously) options, and the Canadian Annual Derivatives Conference in Montreal Canada, which we also sponsored. The prime sponsor was, as in the past the TMX Group (Toronto Stock Exchange and Montreal Exchange) and main topics covered were the retirement of BAX Future replaced successfully by CORRA Futures as well as a strong Bond market, the need for global partnerships to remain competitive and the celebration of 150 years of Montreal Exchange.
At the OIC panellists were praising the strength and growth across all the options markets both nationally and internationally – with some discussions around the growth in retail, risk and the need for continued development in managing the new risks that these large volumes present.
Asia updates
Scila Singapore – Edric Lian and Phil Joslin Attended the 22nd Asia Pacific Trading Summit in Hong Kong on May 21st. This was the 2nd event Scila attended in Hong Kong and it was great to see contacts we made last year, as well as making new ones. We saw a large interest in multi asset class trade and risk management solutions to replace legacy systems. More clients are trading global assets and looking for cross asset coverage. Several firms are looking for sophisticated Trade Surveillance solutions with extreme scalability with increasing volumes. More counterparties are interested in the ability to use Scila’s sandbox environment in the same solution to calibrate parameters around multi asset classes.
Earlier in May we had the pleasure of returning to the vibrant financial centre of Malaysia, Kuala Lumpur with our event partners Horizon Trading Solutions and ICE. We witnessed a growing vibrancy in the market and a renewed interest in being able to integrate E Comms into a Trade Surveillance solution. With the Bursa Malaysia growing their product range many of the Banks and Brokers are looking for multi asset solutions for their risk management in order to grow with their clients needs. A great networking event at the W Hotel after the presentations were enjoyed by all.
Europe updates
Scila once again exhibited at the FIA IDX event in London on June 18th and 19th. An excellent event gave us opportunities to meet existing clients along with a wide range of market participants, with over 1300 attendees.
The speaker schedule included insights on the priorities for the European Commission, the future of the EU/UK relationship and the impact of current geopolitical developments.
Also discussed were regulatory developments from policymakers on the continent and the UK, and how the regulatory landscape is evolving and the potential impact of a changing political climate.