Industry News
Pepperstone data leak: Kudos for handling it correctly! – FinanceFeeds
Pepperstone does the right thing and holds its hand up to a data leak, reassuring customers. We look into why cyber security is so important in FX, here is our full and detailed report Putting your hand up and admitting important matters in a transparent fashion is the number one tenet of running a business…


Pepperstone does the right thing and holds its hand up to a data leak, reassuring customers. We look into why cyber security is so important in FX, here is our full and detailed report
Putting your hand up and admitting important matters in a transparent fashion is the number one tenet of running a business properly.
On this basis, absolute kudos must go to Australian retail FX and CFD company Pepperstone this week, notably around the way in which the company dealt with a data leak that temporarily plagued its systems.
This is the first time in my 29 year career in FX, most of which bas been within the infrastructure and systems development sector, that I have ever seen any company in any capacity whether a bank, liquidity provider, platform vendor or integration specialist openly admit that a data leak has occurred and to actively reassure customers without being prompted that all is well.
As client and transaction data privacy and security is so critical in financial services, most companies hide any mishaps until it is too late, resulting in mass complaints, uncertainty and eventually a poor reputation, but in the case of Pepperstone, clients and partners should hold the company in high esteem for its self-prompted reaction.
In a notice to customers yesterday at 13.07 UK time, Pepperstone explained that it had been the subject of a data leak, and detailed exactly what had happened, reassuring clients that absolutely no potential harm could come to their trading account or funds held with the company.
The company referred to it as a “data security incident which impacted people who had registered for a Pepperstone live or demo trading account.”
The company then listed exactly the data which their investigation showed had become exposed, those aspects being registrants’ name, contact details including address, date of birth and security questions and answers that were chosen.
Pepperstone confirmed categorically that trading accounts, passwords and bank account information had NOT been compromised and are safe.
This is a very courageous and transparent move from Pepperstone, and is one which will instil confidence in its client base and Pepperstone should be commended for it. Consumer confidence is vital, and reaching out to reassure clients is the right thing to do. I personally hope Pepperstone gets recognized for this.
Cyber security is a very important factor in all areas of financial services, and in many large scale electronically operated financial markets businesses such as Tier 1 banks, exchanges and insurance companies, it is common practices for professional services consultancies such as Accenture, Steria, Fujitsu or Capita to have their consultants on site on a contracted basis to manage data security.
Here in London, almost anyone who lives in central areas of the city will have a neighbor or friend who works for one of the big consultancies and is assigned to a financial services company as a data security architect.
But this does not exist in the FX industry. Even the very large FX brokerages do not utilize IT consultancies for data security, largely because many brokerages do not consider technology to be the heart and lifeblood of our industry, even though it absolutely is.
In many cases, data leaks and outages have been intentionally ignored.
Two years ago, Tim Thompson, CEO of British payment payment service provider and risk management technology company NOIRE explained to FinanceFeeds that FX brokerage accounts are usually accessible online needing only a username and password in order to gain access to sensitive data and exposure to fraudulent withdrawals.
“It can start in a number of ways” explained Mr. Thompson. “These methods include fraudsters phishing customers details, through emails pretending to be from the broker and telephone calls, Trojan malware programs often downloaded for trading platforms which look legitimate but could be obtaining customers’ login details and passwords. Fraudsters do this on an industrial scale and gain access to many customer accounts across many businesses.”
Mr. Thompson had categorically stated that he had been aware of several successful attempts by hackers to access FX customer trading accounts and successfully facilitate withdrawals, something which prevailed during the course of last year.
FinanceFeeds knows that this has happened to a few large brokerages, one of which was FXCM around 5 years ago, and there have been many cases of this among Japanese brokerages, but they have kept quiet about it.
GMO Payment Gateway, one of the largest electronic payment systems in the world admitted a payment gateway data breach in 2017, but that was only after it was made to admit it.
As the technology that counters hacking and cyber crime continues to be a subject of great investment by developers, the unfortunate reality is that, rather like germs that increase their immunities to improvements in medicine, the viruses and methods used by hackers are also highly evolutionary, and most FX firms aren’t interested in investing in such technology.
Over the past two years, ransomware continues to be a bugbear that most online trading firms and e-commerce entities should be aware of.
This, according to many internet security specialists, continues to develop in sophistication and will likely become a worse problem in 2017 than it was last year.
Ransomware is a form of malware that is used to encrypt all data held on computers or on smartphones that do not use the iOS operating system.
The idea behind it is that it allows a hacker to extort an amount of money from the owner of the data – for example customer records held in an online trading company’s CRM – and if the amount requested is not paid, then the hacker deploys the encryption and destroys the data.
This is often used against not only commercial enterprises but also government agencies, therefore the extent of its level of sophistication and ability to penetrate security systems is patently obvious.
A particular thing to check here is affiliate links.
It is advisable when inserting affiliate links into websites that they are as originally defined, and that they do not appear to show unusual or differing characters than when they were inserted. These could be used to deploy ransomware, thus the advertisement which looks quite correct when viewed on a broker website may be contaminated with malware and once it is there, it is very very difficult to remove.
Brokerages, IBs and their clients should be very wary of emails which prompt them to update their passwords. For clients, these could be trading account access passwords, for IBs they could be portal or CRM passwords and for brokers they could be back office passwords.
Anything that appears to be automatically generated and does not come from what appears to be the correct format of internal corporate email address, our advice is not to click on it as it could contain code that grants hackers access to the trading account of retail clients, or the database owned by a broker, or even worse, the withdrawals system.
Domestic and international corporate espionage through hacking will increase as companies raid the intellectual property and trade secrets of other companies for profit. The theft of the plans of Lockheed Martin’s advanced F-22 fighter plane by Chinese hackers is an example of this trend. Chinese national Su Bin was convicted for his part in the stealing of the plans for the plane, and there is absolutely no reason at all why this type of espionage could not take place in the online trading firm, with counterfeiters wanting to get hold of new platform designs (MetaTrader 4 is the subject of massive counterfeit activity in China, and now with MetaTrader 5 having risen to popularity, espionage is not something to rule out).
The same applies to R&D departments of brokerages which have their own platforms and multi-asset offering, as hackers could spy on new unreleased designs and emulate them in order to beat them to market.
One thing to consider is that investment in cyber security startups has rocketed over the last few months. The Israel Export Institute stated at the Israel HLS & Cyber Conference that investment in cyber-security startups climbed more than threefold and exports increased 15% in the first half of the year, compared with the same time in 2015. That made Israel the No. 2 destination for cyber-security investment globally after the United States.
A clear indication that any online financial product is not immune from cyber threats is that even central banks and large institutions have experienced some very damaging interference from outside.
The 2017 hacking of Britain’s Tesco Bank, the Bangladesh Bank and Russia’s Central Bank were just the tip of the iceberg of attacks on banks around the world that have been successfully perpetrated by groups such as the Carbanak gang for several years.
These days, the institutional sector has in some form adopted systems that provide dedicated connectivity. Venue-neutral Canadian infrastructure provider TMX Atrium put in place points of presence between Paris, London, Frankfurt and Moscow during 2013, however this venue-based connectivity has not filtered its way into the OTC retail sector on a widespread scale, a likely reason being the cost of implementing dedicated infrastructure to many smaller retail firms being high, especially when margins are low once spread, IB commission, client acquisition and retention costs and operating expenses are taken into account.
Going back 10 years, I had endless contact with TMX as it continued to major on this infrastructure, but now all has gone quiet. Most retail brokerages don’t know what points of presence are, let alone care about how they can secure not only the speed of transaction and give them an edge over other firms, but also the security of client data.
In October 2016, Integral Development Corporation experienced an outage between the hours of 8.43am and 10.50am EST on the 19th day of the month, having its cause rectified later that day during a planned maintenance session.
FinanceFeeds contacted senior executives at Integral Development Corporation in order to establish the cause of this and to gain perspective on how it was resolved, however no reply was proffered, thus FinanceFeeds conducted investigations via trading logs and back office systems reports of several industry partners.
Whilst the reports from the back offices at various sources confirmed the outage, it is important to research the cause, which according to various industry information gathered by FinanceFeeds deduced that the cause of the outage was rectified in planned maintenance later in the day, itself taking 15 minutes longer than usual.
According to several industry sources, the outage occurred during the morning, however, at approximately 5.00pm Eastern Standard Time, during the period which is a period colloquially known as ‘roll’, which is when a number of server restarts happen and many traders in jurisdictions outside North America are inactive, Integral Development Corporation conducted maintenance which included a resolution to the cause of the outage earlier in the day.
This calls into question whether a back up system should be in place which diverts to an emergency server farm in the case of such an outage. Such systems have been commonplace in financial technology infrastructure for many years, including during my early years from 1991 onwards when infrastructure providers were continually testing uninterruptible power supplies (UPS) and uploading entire data sets onto DAT tapes constantly, to be able to switch to other servers in the event of an outage.
More recently, the bandits appear to be as smart as even the largest of institutional internet security firms, hence vigilance and investment in furthering the cause of keeping the entire intellectual property, client assets and structure of online trading businesses is now paramount.
Well done Pepperstone, keep up the good work. Maybe now is the time to lead the way and bring in the cyber security companies, host a few events on cyber security in the FX industry and raise awareness. This would build the steps toward our industry taking this as seriously as other financial markets sectors.
Daily Financial News
What is the best crypto wallet ?


What is the best crypto wallet: a hardware wallet, a software wallet, or a mobile wallet?
In the early stages of learning how to use Bitcoin, the security question arises: how to ensure your coins remain in your possession? Only by generating and storing keys in a way that can be verified can you be certain. It is impossible to be sure no one else has a copy of your keys unless you know they were created properly and stored offline.
Hardware wallets create your keys offline using a random number generator, so they cannot be logged. Additionally, the keys are kept permanently offline, so they cannot be accidentally shared on a network.
In software wallets and mobile wallets, random number generators are often built into the device the wallet is installed on. Since they use inputs like the current time to calculate randomness, they are difficult to verify and generally not secure. Even if your device generates randomness in a secure manner, host the resulting keys on a networked device, and an attacker can extract, view, or intercept them at any time.
It is transparent to verify that open-source hardware wallets create and store randomness securely, and that your keys are kept offline while being protected from threats like phishing. It is different in the case of open-source Bitcoin wallet though.
In addition to protecting against other vulnerabilities, hardware wallets resolve new attacks both progressively and reactively among security researchers. Supporting bug bounty programs ensures that all types of security issues are regularly checked.
Stay more secure everywhere
Hardware wallets have set a new standard for universal cybersecurity, as we discussed above. According to speculators, the future of the internet – dubbed Web3 – will rely on cryptographically secure keys backed up physically. In the cryptosphere, as well as in everyday business, e-commerce, and social media, hardware wallets are essential.
Your assets and identity are both protected offline when you use a hardware wallet for authentication, so there is no counterparty risk.
As a result of forgetting passwords and changing authenticator devices, security has long relied on third parties. Using the open recovery seed standard, users can backup their accounts safely without relying on a third party and recover accounts from any compatible device. Using Shamir backup, the recovery seed is split into multiple equal parts for stronger security.
Keeping in mind that not just crypto can be targeted is important. Similarly, your data can be leaked, resulting in phishing attacks, hostage situations, or compromised devices arriving by mail.
It has become easier and more affordable for everyone to have verifiable security thanks to hardware wallets.
The base layer of crypto security is hardware wallets
By bridging the digital and physical worlds, hardware wallets create digital keys offline and keep them safe. Crypto assets can be controlled with the keys in many ways, such as two-factor authentication, digital signatures, or two-factor authentication.
With open standards, you can ensure the same level of security across any app you use. As a result, dozens of hardware wallet manufacturers have appeared around the world, accelerating the adoption of crypto security and ensuring standards are maintained to ensure your coins remain yours regardless of wallet.
Industry News
School4Trading Review – How to Spot Possible Forex Broker Fraud
School4Trading Review – How to Spot Possible Forex Broker Fraud
In this School4trading Review, we will look at the features of the software, as well as the customer support. First, let us look at the interface. The design is simple and easy to navigate. It also provides a chatbot, which helps you to communicate with the broker. The customer service is warm and inviting, which is a hallmark of a good broker. In contrast, a fraudulent broker will use cold and impersonal customer support to lure people in.
Another problem with the system is that the login process is not always intuitive. You may have to retype your password several times to get in. Then, you may experience difficulties withdrawing your funds or accessing your account. In such cases, you might have to wait for days or even weeks before you can withdraw the money you’ve invested. This is not a good sign. It’s better to choose a different trading platform altogether.
If you’re having trouble logging in, you should also check the legitimacy of the broker. Whether the broker is licensed by a reliable regulatory body or closed down, you’ll want to be sure it’s legitimate. If the broker isn’t licensed by the right body, don’t trust him. You shouldn’t waste your time with an inexperienced company. This will only cause you problems in the long run.
The next factor that should be checked is the licensing. A legitimate broker will have a license from a high regulatory body. However, a broker without a license will be unreliable. Moreover, a reliable regulator will take away the license of a scam broker. As a result, a trustworthy School4Broker/Profittrade review should mention fees, account rules, and contract terms. A scam broker will be unable to operate legally.
Secondly, look for warning signs. The broker should be licensed and regulated by a reliable regulatory body. It should be regulated by a high level. If it doesn’t, it’s a scam. Lastly, it should have a website that lets you easily access your account. Moreover, you should not hesitate to check the contact information. If you find any information that seems suspicious, you should reconsider using the broker.
In summary, Forex trading isn’t easy, but it doesn’t have to be complicated. It’s not as difficult as it seems if you’ve heard about the program. You’ll learn everything about the basics and how to become a professional. But if you’re still unsure about whether this program is right for you, don’t hesitate to contact a school4trading’s website.
The most important thing to remember when it comes to Forex trading is that it’s not easy. While it’s important to have a strong background in trading, there are a number of factors that can affect your success. Having a proper plan is vital in the long run, because you will be trading with real money. And, the platform should be reliable. Otherwise, you’ll end up losing a lot of money.
As we’ve mentioned, Forex is not easy. Investing isn’t something you can do in the comfort of your own home. You need a proven system. There are no free trials, so you’ll have to find a way to do it yourself. This isn’t a scam, and it’s a great way to make money without any help. A Forex system can help you learn the intricacies of the market.
Although the process of learning Forex isn’t an easy one, it’s certainly not impossible. Fortunately, there are many people who are willing to take the time to learn how to trade. But, even the most experienced trader needs to be aware of the risks of the market. While Forex trading isn’t easy, it can be done with the right knowledge. The software’s user-friendly interface is key.
Daily Financial News
Don’t Count On JPY Correction; Staying Long GBP/JPY


The path of the potential pace of the JPY decline may still be underestimated by markets, which continue trading the JPY long.
While the 10% USDJPY advance from September lows looks impressive from a momentum point of view, it may no thave been driven by Japan’s institutional investors reducing their hedging ratios or Japan’s household sector reestablishing carry trades.
Instead, investors seemed to have been caught on the wrong foot, concerned about a sudden decline of risk appetite or the incoming US administration being focused on trade issues and not on spending. Spending requires funding and indeed the President-elect Trump’s team appears to be focused on funding. Here are a few examples: Reducing corporate taxation may pave the way for US corporates repatriating some of their USD2.6trn accumulated foreign profits. Cutting bank regulation could increase the risk-absorbing capacity within bank balance sheets. Hence, funding conditions – including for the sovereign – might generally ease. De-regulating the oil sector would help the trade balance, slowing the anticipated increase in the US current account deficit. The US current account deficit presently runs at 2.6% of GDP, which is below worrisome levels. Should the incoming government push for early trade restrictions, reaction (including Asian sovereigns reducing their holdings) could increase US funding costs, which runs against the interest of the Trump team.
Instead of counting on risk aversion to stop the JPY depreciation, we expect nominal yield differentials and the Fed moderately hiking rates to unleash capital outflows from Japan.The yield differential argumenthas become more compelling with the BoJ turning into yield curve managers. Via this policy move, rising inflation rates push JPY real rates and yields lower, which will weaken the JPY. Exhibit 12 shows how much Japan’s labor market conditions have tightened. A minor surge in corporate profitability may now be sufficient, pushing Japan wages up and implicity real yields lower.
JPY dynamics are diametrical to last year . Last year, the JGB’s “exhausted”yield curve left the BoJ without a tool to push real yields low enough to adequately address the weakened nominal GDP outlook. JPY remained artificially high at a time when the US opted for sharply lower real yields. USDJPY had to decline, triggering JPY bullish secondround effects via JPY-based financial institutions increasing their FX hedge ratios and Japan’s retail sector cutting its carry trade exposures. Now the opposite seems to be happening. The managed JGB curve suggests rising inflation expectations are driving Japan’s real yield lower. The Fed reluctantly hiking rates may keep risk appetite supported but increase USD hedging costs.Financial institutions reducinghedge ratios and Japan’s household sector piling back into the carry trade could provide secondround JPY weakening effects
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