This day in history – June 24, 2011: The rise and fall of social trading network Currensee

Five years ago today, social trading was a huge and exciting new phenomenon, its development having been embraced with the same verve and vigor by industry executives in the retail FX sector back then as FinTech development and fostering high quality prime of prime relationships is today.

Five years, however is a veritable eternity in the lifetime of modern developments in electronic trading, and social trading has evolved tremendously from its early days, and the hysteria has given way to sensible and fully integrated solutions which engage traders and create value for brokerages rather than the bottomless pits and white elephant projects of yore.

As hard to imagine as it may be, on this day five years ago, Currensee had reached its peak with a remarkable $12 million in assets under management, which had been invested by participants in its Trade Leaders program.

The company had, in just seven short months, recorded a degree of substantial success with the Trade Leaders program, and by June 26, 2011, $6 billion in volume had been traded through the program, a 50-percent increase since April 14, 2011, more than 400 individual investors had been actively participating in the program with an average investor account size exceeding $25,000.

An average of 3,500 trades were being executed every day, using the Currensee Intelligent Trade Replication Technology, however this was a short-lived moment of success for the social trading network.

Currensee’s halcyon days are long gone, and the company bit the dust in October 2014.

The long, lonely road to ruin was an interesting one, however, as the company went through some interesting mergers and acquisitions activity before being canned just under two years ago.

Back in 2008, Currensee was founded in Boston Massachusetts by Israeli software developer Asaf Yigal, and his compatriot, Avi Leventhal, a professional FX trader.

The company was led by CEO Dave Lemont, and operated from Boston’s North End neighborhood.

During the recession that blighted the financial markets in the later years of last decade, Mr Yigal and Mr Leventhal identified FX trading as a very exciting alternative asset class and a new way to trade together, taking the fear factor away from inexperienced retail traders and empowering them.

The ideology was not new, this concept having been invented by Israel’s Lior Nabat, CEO of Tradency in 2005, however Currensee took the solution to a very international audience, going beyond technology provision (Tradency is purely a FinTech firm and does not involve itself in the brokerage business at all) Currensee obtained an FCA license from the British authorities, and became a National Futures Authority (NFA) member in the United States.

Following the highs that the company reached on this day five years ago, suddenly interest began to tail off, and the company had become unable to sustain itself as an independent and profitable organization, especially bearing in mind its founding which involved approximately $20 million in venture capital funding.

Under the leadership of former CEO K Duker, OANDA Corporation bought Currensee in September 2013, paying according to sources, a fraction of what was injected into it by its original venture capital investors.

This appeared a very unorthodox move at the time, as OANDA Corporation is a technology led company that is well recognized for developing its own solutions, social trading being no exception, as OANDA had developed and launched its proprietary social trading network fxUnity, and then canned it after just a short time on the market.

Despite canning its own solution and the development costs associated with it, the purchase of Currensee may have appeared an unusual step, however this took an even more intriguing turn when OANDA Corporation canned Currensee altogether in October 2014.

K Duker left the company shortly after the decision to purchase Currensee was made, just 18 months after his initial appointment.

In September 2014, IBFX, the at the time North American division of Japanese giant MONEX Group, removed its MetaTrader 4 offering, waving goodbye to several other services from IBFX’s portfolio, including the Currensee accounts and the ZuluTrade accounts.

This substantial change came after the broker having announced in July that same year that it would discontinue its own social trading platform Connect. This signaled the end of Currensee’s last remaining data.