FX week in review: eToro IPO trouble, Catena selling FX sites, Australia binary options ban

Gerald Segal 0 Comments May 29, 2022

Why are eToro’s plans to go public hitting some serious headwinds? What funding alternative is eToro, which posted a net loss of $265 million in 2021, looking at? (And, why did eToro say it is late in reporting its Q1-2022 results?)

What has led to publicly traded lead generation company Catena Media (STO:CTM) saying it was looking at the sale of certain assets, including its “Financial Trading” websites?

What did Australia regulator ASIC say it will do about the soon-to-expire ban on Binary Options in the country?

Who did Australia’s Invast name as CEO of its Cyprus based operation?

Answers to these questions, and a whole lot more, appeared first or exclusively this past week at FNG. Some of the most read and commented-on FX industry news stories to appear over the past seven days on FNG included:

eToro looking at alternatives to SPAC IPO. Various business news sources in Israel are reporting that eToro’s plans to go public via a merger with a special purpose acquisition company (SPAC) are in trouble, and that the Israel based Retail FX and CFDs broker is now looking at funding alternatives. News site Bizportal has gone as far as reporting that eToro has indeed cancelled its planned merger with the SPAC Fintech Acquisition Corp V (NASDAQ:FTCV). Another source, Calcalist, stated that while eToro continues to work to complete the SPAC merger, it is also in “advanced stages” of completing a private funding round of between $800 million-$1 billion, at a valuation of $5-6 billion.

Catena Media looking to sell Financial Trading and possibly other sites. After seeing its shares plunge to a 52-week low following the release of its Q1 financial results last week, online gaming and financial trading lead generation company Catena Media plc announced Friday that it was initiating a “strategic review of certain parts of its business.” The company said that this could involve a sale of certain assets, including but not limited to its Financial Trading related websites, the “AskGamblers” brand and other global brands, or another type of structural transaction.

eToro blames SPAC and crypto disclosure rules for delay in Q1 results. Retail FX and CFDs broker eToro has issued a regulatory filing with US regulators, stating that recently, the U.S. Securities and Exchange Commission (SEC) published proposed rules for enhanced disclosures for special purpose acquisition companies (SPACs) and published updated accounting requirements related to crypto companies. eToro said that it has been studying these updated policies and the required adjustments. This has caused a delay in the distribution of its Q1-2022 earnings. The company provided a letter to its shareholders on the matter, asking for “patience and understanding – and we highly appreciate it.”

Freetrade raises £30M as 2021 Revenues top £15M. App based UK/EU neobroker Freetrade (at website freetrade.io) has announced that the company has raised £30 million (USD $37.5 million) in its latest funding round. Freetrade said that all existing institutional investors participated in the round, including Molten Ventures, Left Lane Capital and L Catterton. They were joined by new investors, the Phoenix, an investment manager with over $100bn in assets, and Capricorn Capital Group, a private investment firm. The funding came in the form of a convertible loan, which didn’t require a re-valuation of the company.

ASIC plans to extend binary options ban until October 2031. The Australian Securities and Investments Commission (ASIC) today unveiled a proposal to extend its product intervention order banning the issue and distribution of binary options to retail clients, until it is revoked or sunsets on 1 October 2031. The regulator banned the sale of binary options to retail clients, with effect from 3 May 2021, after finding that binary options had resulted in and were likely to result in significant detriment to retail clients. The product intervention order will expire on 7 October 2022 unless it is extended with the approval of the Minister.