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After years of flying under the radar, digital assets appear to have gained the full attention of regulators and tax authorities around the world.  With increased attention comes increased scrutiny – something being seen in the ‘Great White North’ as the Canadian Securities Administration (CSA), and the Ontario Securities Commission (OSC), each look to hold market participants accountable for their actions.  The following are a few of the ways which accountability will be upheld among service providers.

  1. Required Exchange Registration
  2. Enforcement Actions
  3. Restrict leverage-trading
  4. Mandatory reporting of high-value transactions

Registration Needed

In early 2021, the OSC announced that it was placing a deadline on exchanges servicing residents of the province to register with regulators if access was provided to either securities or derivatives.

This move – which promised resulting ‘regulatory action’ if not adhered to – was taken with the goal of protecting investors.  Grant Vingoe, CEO of the OSC stated, “Unregistered crypto asset trading platforms expose Ontario investors to significant risks, including potential loss, theft and misuse of their assets. The recent explosion of unregistered platforms has magnified these risks…Regulatory oversight serves a critical role in investor protection, and we expect platforms to act swiftly to bring themselves into compliance with Ontario securities law.”

The deadline of April 19th has now come and passed.  As such, it is clear that the OSC has now changed gears, and will be turning to enforcement actions against those that have not registered.  This was just made clear when Poloniex became the first high-profile target for accountability.

Enforcement Action Against Poloniex

As stated Poloniex is the first to become subject to scrutiny by the OSC post-registration deadline.  In a recently release ‘Statement of Allegations’, the OSC alleges the following breaches.

  • Poloniex has engaged in, or held itself out as engaging in, the business of trading in securities without the necessary registration or an applicable exemption from the registration requirement, contrary to subsection 25(1) of the Ontario Securities Act, RSO 1990, c. S.5, as amended (the Act);
  • Poloniex has engaged in trading in securities which constitute distributions without complying with the prospectus requirements and without an applicable exemption from the prospectus requirements, contrary to section 53 of the Act; and
  • Poloniex has engaged in activity that is contrary to the public interest.

As a result, the OSC is seeking the Poloniex not only halt trading in such assets, but that they are reprimanded due to past actions.  Furthermore, the OSC hopes to prohibit the exchange from registering as a fund manager for an undetermined period of time.

If found guilty on these charges, Poloniex may find itself on the hook for up to $1M in fines for each breach of securities law, in addition to any court fees associated with the process, along with various other fines.

Needless to say, any exchange doing business in Canada will be watching this situation closely as it unfolds.

Leverage Trading

Since day one, cryptocurrencies have been synonymous with volatility.  Some investors view it as an opportunity, while others view it as a roadblock to mainstream acceptance.  While this debate rages on, little clarity has been shed on what the true root cause of volatility is.  This might be changing however, as various CEOs now believe they know the cause – leverage trading.

Leverage trading, which allows for investors to trade with borrowed funds, is an extremely risky practice.  By taking part, both the potential gains AND losses of a trade are amplified.  Among digital asset exchanges, this practice has been taken to the extreme, with many offering leveraging as high as 100:1.  This massive ratio means massive price swings when liquidations occur.

Speaking with CNBC, JMP analyst Devin Ryan stated, “Selling begets more selling until you come to an equilibrium on leverage in the system…Leverage in the crypto markets – particularly on the retail side – has been a big theme that accentuates the volatility.”

While some exchanges limit the ability to utilize leverage trading to their professional accounts, the ability for such ratios may soon disappear altogether as the OSC has called out Poloniex for allowing the practice in its recent statement of allegations.  Users of other platforms like Crypto.com have already received notice that the practice is being halted in their jurisdiction.

High Value Reporting

While Poloniex currently finds itself as the centre of attention, it was perhaps Toronto based exchange, Coinsquare, which first felt the wrath of the Canada Revenue Agency (CRA).

Months ago, in chain of events which resembled those involving Coinbase and the IRS years ago, Coinsquare was forced to hand over client data.  While the exchange was able to negotiate limitations on the amount of data which was released, it marked an important event – crypto is not anonymous, and authorities will go to great lengths to prevent potential money laundering.

If one thing is clear from each of these examples, it is that a day of reckoning is coming to service providers that flout the rules.  Warranted or not, regulators and tax authorities have progressed to ensuring accountability through more than guidance letters, but actual large-scale enforcement actions.

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Naabiae Nenu-B is a Medical Health Student and an SEO Specialist dedicated to flushing the web off fake news and scam scandals. He aims at being "Africa's Best Leak and Review Blogger" and that's the unwavering stand of Xycinews Media.

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Fx Analysis

Chart Art: Support and Resistance Points on USD/JPY and AUD/USD

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Ready for the weekend?

I know y’all aren’t done trading for the week because USD/JPY and AUD/USD’s setups are still waiting to be taken!

Check them out!

USD/JPY 1-Hour Forex Chart
USD/JPY 1-Hour Forex Chart

I don’t know if you’ve noticed but the dollar bulls are putting up a good fight at the 109.50 range support that’s been around since the start of the month.

The oscillator isn’t helping the bulls’ case for now but MarketMilk did indicate that USD/JPY is a “buy” in the short-term.

Buying at current levels would set you up for a decent win if USD/JPY stays inside its month-long range.

The 110.00 mid-range resistance is a good target if you’re in it for short-term profits but you can also aim for the 110.60 range resistance zone if you’re confident in the dollar making more pips against the yen.

But what if USD/JPY extends its downswing? Watch out for a clear break below the support to see if the dollar would head for its June lows next.

AUD/USD 4-hour Forex Chart
AUD/USD 4-hour Forex Chart

Comdoll warriors gather ’round!

AUD/USD looks ready to bail from the .7400 major psychological handle, which is right smack at the 38.2% Fib retracement of July’s downswing as well as a trend line resistance that’s been keeping the bulls in check since mid-June.

Will AUD/USD extend its losses in the next trading sessions? Aussie bears can short at current levels and gain decent risk ratios from placing stops just above the trend line resistance.

Meanwhile, comdoll bulls who believe that AUD/USD is due for a reversal can watch out for a break above the trend line resistance that we’re watching and target previous areas of interest like .7485 or .7600.

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Fx Analysis

5 Main Reasons Why Forex Traders Lose Trades

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It is often said that the odds of being consistently profitable and succeeding in the forex market are very slim, as more than 90% of traders are bound to face failure.

Here are five common reasons why this usually happens:

They don’t understand key indicators, key numbers, ideal times to trade, and how the market works.

Would you enter a battle without knowing how to use weapons or who your opponent is? When you place a trade, you literally go toe-to-toe against some of the biggest nerds in the industry.

Many professional traders are not only super smart and Ivy League educated, they’re also rich. That doesn’t mean that you, the small guy or gal, can’t win.

It just means that you simply must educate yourself and be prepared to do battle. David can beat Goliath, but only if he’s prepared. Some people might think the cost of a trading education is too high. But the cost of ignorance is way more expensive.

They don’t have a tried-and-tested trading methodology

Trader loserWith no proven trading method or strategy, you are doomed to fail. You will end up quitting the game after a string of losses. But there is hope.

With the right education, a workable method, psychological balance and persistence, it can be done.

Start by experimenting on different currency pairs, trading sessions, time frames, and indicators and pinpoint which ones work for you.

Work on creating your own trading system and back and forward test if it’s profitable. Focus on the numbers and fine-tune your method to maximize profitability. This may take time, but using a trading method that you trust can go a long way at reducing stress while trading.

They risk too much per trade.

A wannabe trader risks 10% or more of her trading account on a single trade. This is problematic because when you’re worried about making money, you won’t focus on your trading process. You’ll end up focusing on your profits/losses.

Consistently profitable traders understand the trade’s risks and manage them first BEFORE thinking about profits. They know how to calculate their position size. They don’t take trades if it forces them to risk too much.

This gives them the staying power to keep their heads and make rational decisions even if they end up with multiple losing trades in a row.

They’re not mentally prepared.

Trading psychology is a huge part of trading and most people are not mentally prepared. When money is on the line, fear, greed, and other emotions make trading very hard.

Make sure you understand the emotional aspects of trading and be prepared to control them before you risk your hard-earned money.

They’re having a bad day.

Sometimes, there are just factors outside of your control. You could spend bajillions of hours preparing for a trade and a surprise currency intervention, flash crash, glitch in your platform, or a natural disaster could turn the tides against your favor.

It’s okay. It’s all part of the business. If you’ve managed your risk, you can chalk up the losses to a bad day and start again tomorrow.

That’s it for today’s list! Did I miss anything? What’s the usual reason for you losing your trades?

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Fx Analysis

Precious Metals Rise Significantly With Rate Fears Soothed

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  • Gold and Silver Strongly Positive Today
  • Other Precious Metals Follow Closely
  • US GDP Miss Likely to be Focus of Day

Commodities news has had a relatively quiet week by comparison with the other markets as equities endure an earnings season rollercoaster and the torrid week looks to end on a positive note for US-listed China stocks. The Dollar has also continued to strengthen in the forex market following the Fed policy announcement though more on the back of the US miss on GDP numbers released today. This is also likely to have an impact on metals and other commodities but for now, gold, silver, platinum, and palladium have all moved meaningfully higher during the early US trading. 

Price Jump for Gold and Silver

Both of these precious metals have largely managed to stay out of the limelight recently. With the environment being quite tumultuous, there were minor movements in both, the general feeling though has been one of traders holding on to see how things developed. This strategy has paid off today with a healthy boost to both. Gold has peaked above a weekly high of $1825 while silver closes in on $26. 

This represents a move of more than 2% at the time of writing for gold, and more than 3% for silver. The main reason behind these moves at this point in the week certainly seems to be the Fed policy announcement and the fact they are standing behind their low interest rate with no short-term plans to change. 

Other Precious Metals Also Rising 

Alongside gold and silver, it has been a positive start to the day for platinum and palladium. Both are up over 1% on the day so far and are also likely beneficiaries of the Federal Reserve position to continue support for low interest rates. Although the Dollar has risen again on news of the US GDP figures, both seem to be holding their positive position. 

Although a weaker US Dollar would be helpful for the most part for these two as well as gold and silver, other factors need to be weighed. The interest rate is a key issue that can make investing in precious metals much more attractive when it stays low. Add in the industrial uses boom that can accompany such market conditions, and it is typically a winning formula.

US GDP Miss Surprises Analysts

Market analysts had predicted a rise of 8.4% for the previous quarter from April to June. This number has actually come out at 6.5% before any revisions. It is quite a wide economic miss and traders will have to weigh up these figures as the day progresses.  

So far, however, there has been very little sign of the market taking this miss as harshly as many would usually expect. The US Dollar has strengthened, but this has not taken anything major away from commodities, or more specifically precious metals in gold and silver. Wall Street is also expected to open higher despite the news.

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