LeapRate's Daily Forex Industry Newsletter
Join now to receive first access to our EXCLUSIVE reports and updates.
Screenshot of a breaking news alert e-mail from Q2 2017
LeapRate Exclusive… LeapRate has learned that 8Safe UK Limited, the FCA regulated arm of Limassol-based retail forex broker IronFX, has seen a large decline in activity in 2016.
The company, originally set up in 2012, changed its name from IronFX Global UK Limited to 8Safe UK Limited in late 2015, after parent company IronFX ran into both legal and reputational problems related mainly to its operations in China. Other than IronFX UK, 8Safe also operates the FXGiants retail FX brand.
Overall, 8Safe revenues declined by more than 80% from £4.2 million (USD $6.1 million) in 2015 to just $1.1 million in 2016. The company posted a $194,000 loss in 2016 versus a $213,000 profit in 2015. However, company funds held by 8Safe grew from $11.7 million in 2015 to $16.2 million at the end of 2016.
IronFX UK, alongside the rest of the IronFX group which includes regulated subsidiaries in Cyprus (IronFX Global Limited) and Australia (GVS (AU) Pty Limited) underwent a significant restructuring from 2015 into early 2016, which included significant layoffs, marketing budget cuts, and other cost reductions – accounting for both the drop in revenue and costs.
As with other UK subsidiaries of global brokers, it is hard to ascertain what the ‘real’ profit is, since client trades are often hedged or offloaded to other group companies abroad, such that the ‘real’ profit or loss is realized elsewhere. However, Revenue is usually a good measure for determining how the company is doing growth-wise. And in this case, it is clear that the company’s activity levels were well down in 2016.
IronFX is currently in a multi-stage process to merge the company in a reverse takeover with publicly traded Nukkleus Inc (OTCMKTS:NUKK), which will effectively merge IronFX and its various subsidiaries with retail forex broker FXDD and currency trading platform provider Forexware. IronFX is controlled by its CEO Markos Kashiouris, while each of Nukkleus, FXDD and Forexware are controlled by Emil Assentato, former Chairman of Tradition North America, the U.S. arm of Swiss interdealer broker Compagnie Financiere Tradition SA (SWX:CFT).
As we’ve explained before, the planned merger does not mean that all the businesses and brands will take on one name, or even be folded under one management group. While that’s a decision for the company further down the road, we believe that the companies and brands – IronFX, FXDD and the Forexware platform business – will continue to have separate names and brands, separate management teams, and will keep their individual regulatory licenses. They will just be owned by the same corporate entity (Nukkleus Inc), instead of separately by Mr. Assentato’s various holding companies.
IronFX UK (8Safe UK Limited) income statement for 2016 follows: