Last week regulators from the US, Britain, and Switzerland announced fines of $4.25 billion against several major financial institutions for conspiring to manipulate the foreign exchange markets. Simultaneous with the settlement announcements, the CFTC published select transcripts detailing chat room evidence of the manipulations. The transcripts are rough reading, especially if you aren’t a text-happy teenager well versed in financial slang and impervious to foul language. But because they afford critical background for our story, we’ve decided to translate a short excerpt from one chat into clearer, safe-for-work English. The excerpt comes from three traders discussing how they could manipulate the 4 pm WM fixing for GBP-USD (often referred to as “cable” by FX traders), selling large amounts just before the fixing to drive the rate down. Trader 1 (70 minutes until fix): it’s early but I am selling cable…

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On January 1, 1999, the euro (EUR) made its debut as an official European currency and lawful means of exchange for 12 independent states. Ten short years later, another revolutionary currency was introduced to the world. This new money is the first attempt at a “crypto-currency” and has recently become a topic of immense interest in financial circles, not just for its technical idiosyncrasies (you can “mine”) but its economic rules: decentralization, fixed supply, pure floating currency. We’re talking of course about Bitcoins (BTC). If you read the Wall Street Journal, The Economist, Financial Times, chances are you have come across the concept; maybe you’re one of the few that’s been curious enough to trade. What separates the euro, the US dollar, or other traditional currencies from Bitcoins is that they’re not issued by a central monetary authority. Standing in…

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