XTX Markets earns £1.095 billion in 2022 as revenue surges 68%

abdelaziz Fathi

XTX Markets, a non-bank FX liquidity provider and market maker, has reported its financials for the fiscal year ending December 31, 2022. The report showed impressive metrics after seeing revenues and customer activity increase even as the pandemic trading boom fizzled out.

XTX Markets

In the 12 months to December, the FCA-regulated entities’ revenue was reported at £2.5 billion, up by two thirds from £1.48 billion the same period a year ago.

Per its latest filing with the UK Companies House, the firm’s operations generated a record of £1.095 billion in net profits in 2022 compared with £667 million the previous year and £470 million in 2020.

XTX Markets, the parent entity, has steadily climbed the ranks of electronic market makers, now commanding a significant portion of the spot FX turnover, displacing leading banks such as J.P. Morgan Chase in the process.

Further, XTX Markets was the largest electronic spot FX liquidity provider globally for the second year and was also the largest European equities liquidity provider in 2021 as it continues to build out a growing client franchise.

The use of algorithmic execution tools in foreign exchange has increased significantly as coronavirus-led volatility drives FX traders to seek increased efficiencies in trading.

Alongside other asset classes, the FX market has responded to the COVID-19 pandemic with worrying volatility. As a result, investors looked to so-called adaptive algorithms that are based on the machine learning model that allows incremental learning. This has led to the adoption of algos by FX market participants to surge as traders seek a competitive edge.

XTX Markets sues State Street’s Currenex

Earlier in 2022, XTX Markets joined a class action lawsuit accusing State Street’s Currenex of secretly abandoning the industry-standard “first in, first out” practice to allow certain liquidity providers to “jump in line” and obtain unfair privileges.

The lawsuit filed in the Southern District Court of New York was updated, not only to enable XTX Markets to join as a co-lead class plaintiff, but also to disclose a “shocking breach of trust”. Specifically, the non-bank FX liquidity provider and market maker’s investigations discovered a mechanism by which Currenex provided HC Technologies with administrative access that allowed it to see all orders on the platform.

Earlier this year, XTX appointed former JPMorgan executive Hans Buehler as co-chief executive alongside Alexander Gerko, further strengthening the firm’s leadership team.

Alexander Gerko, who holds a 75% stake in XTX, renounced his Russian citizenship and is now a British citizen. Having denounced Russia’s invasion of Ukraine, he was recognized as the 15th richest person in the UK and Britain’s biggest individual taxpayer last year. Within this context, XTX sued accounting firm Mazars for racial discrimination, claiming that their refusal to work with the trading house due to Gerko’s Russian citizenship was unjustified.

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