XTX Markets Joins Currenex Lawsuit

Algorithmic trading company XTX Markets has joined the lawsuit brought against Currenex, which was accused of secretly abandoning the industry-standard "first in, first out" practice to allow certain liquidity providers to "jump in line" and obtain unfair privileges.

In addition to XTX Markets joining as a co-lead class plaintiff, the latest updates regarding the lawsuit filed in the Southern District Court of New York also include the discovery of a mechanism by which Currenex provided HC Technologies with administrative access that enabled it to see all orders on the platform.

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HC Technologies has already been named alongside State Street, Goldman Sachs, and several unnamed defendants in the original compliant of a proposed antitrust lawsuit. The plaintiffs allege that they operate a rigged auction system stemming from secret arrangements that allows them to push to the front of the order queue without entering a competing quote.

According to the lawsuit claim, Currenex, a State Street affiliate operating a leading exchange platform, explicitly abandoned the FIFO feature for matching bid and asks prices. Instead, it allowed the trading defendants to jump the queue through "secret priority agreements".

The defendant's unfair practices aiming at building up liquidity and volumes on the platform have ultimately created "artificial" spreads as other traders were denied the opportunity to be price makers on the Currenex ECN, according to the complaint. Also, the plaintiffs alleges that the liquidity providers named would hold up trades, instead of executing buy or sell orders at the price shown, executing a worse price for investors who used their platforms.