Blockchain Currency Hub (Pty) Ltd, trading as CURRENCY HUB, is a consultancy enabling qualified investors to trade in cryptocurrencies. CURRENCY HUB is a juristic representative of BLACK ONYX, an authorized financial services provider (Cat 1 & 11), licensed and regulated by the Financial Sector Conduct Authority (FSCA) in South Africa, with FSP No. 50850 in terms of the Financial Advisory and Intermediary Services Act (Act No. 37 of 2002), supported further by our in-house SARB approved FX intermediary licence (6176).
Arbitrage is a process that involves buying and selling securities, currency, or commodities in different markets simultaneously to profit from differences in prices for the same asset. These price differences occur due to changes in supply and demand, which can be influenced by factors like access to information, regulations, and capital restrictions.
We take advantage of crypto-arbitrage opportunities by exploiting the price fluctuations of Bitcoin in South Africa, where it tends to be more expensive compared to other regions due to exchange control regulations.
Yes. South African Reserve Bank (SARB) have acknowledged and approved our process
This along with our legal opinion on the Currency and Exchanges Act, and with the support of our counterparties such as Investec and Mercantile, means we are able to engage in legal trading activities involving a fixed amount of money within a short timeframe. This allows us to optimise your R11m overseas allowance.
The premium advertised by many other arbitrage services is based on exchange prices and is misleading. That figure is calculated by taking the best possible prices on exchange at any given time and is often unattainable without taking on additional market risk. When trading on exchanges in large volumes within a single day, it can affect the prices of those assets and the overall market. Our main focus is to manage the risks involved and protect our invested money on a daily basis.
To do this, we primarily use a type of trading called over-the-counter (OTC) trading, which means we trade directly with other parties rather than on a formal exchange. We have obtained licenses from the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) to engage in this type of trading.
By using OTC trading, we aim to reduce costs and minimize the chances of facing potential risks associated with traditional exchange-based trading. This allows us to optimize our trading activities and protect your capital more effectively.
Credit Facility #1 – FIA + Trading Capital is unfortunately at capacity right now. You can join the waiting list found here and we’ll be in touch when it reopens.
Credit Facility #2 – FIA ONLY is active and works as follows:
The credit facility of R2.5 million is solely designated for the purpose of obtaining a SARS Tax Compliance Certificate, after which you will utilise your own funds to complete the actual trading. This approach significantly reduces the workload and costs associated with obtaining your FIA/AIT approvals.
For more info visit our Credit Facilities page
Having the FX intermediary license and the FSCA Cat II discretionary asset management license is unique to CURRENCY HUB. This means that it allows us to simultaneously book and hedge the forex rate while negotiating the best premium rate with the brokers (OTC – Over the Counter).
At this exact point in time, we can see exactly what profits we will make for you before we commit to the trade. Hence, this means we have had a zero-loss track record since inception. The efficiency of this “active trading strategy” ensures that we get the highest profits in the market (OTC).
The maximum amount of money that residents are allowed to transfer out of the country for personal or investment purposes is R11 million per calendar year. This amount is divided as follows:
To obtain permission to utilise your FIA, you must submit an application with the South African Revenue Service (SARS). This process results in the issuance of a Tax Compliance Certificate (TCC or TCC pin) from SARS for the applied amount. An approved TCC pin can then be used to send additional funds offshore as part of your FIA. Once you have utilised the amount allocated by the TCC pin, you will need to obtain another approved TCC in order to send more funds offshore. This process of applying for TCC pins, obtaining approval, and utilising them can be repeated until you have utilised your full R10 million FIA for the year. Our specialist partners handle this application process.
It is important to note that you do not need to have R11 million in order to utilise your SDA and FIA allowances. Your trading capital is repatriated after each trade you perform, which means that the same funds (e.g., R250k) can be utilised until you have exhausted your full allowances.
The counterparty risk we face primarily lies in trusting that we have chosen the best service providers across the entire ecosystem. We have mitigated this risk by having an FX intermediary within our organization and holding the FSCA Cat 11 discretionary asset management license (FSP 50850). This allows us to book and hedge the forex rate while negotiating the best premium rate. The unique advantage of having these licenses in-house is that we can assess the potential profits before committing to the trade, resulting in zero losses since 2017. This approach is pure arbitrage.
The founders of CURRENCY HUB have traded their allowance in the first 3 months (Q1) since 2017. Why? because the Premium diminishes over time and during the year. Yes there are spikes and anomalies, but timing these are impossible. Same applies in trading equities, Warren Buffet states its “better to remain in the market than try time the market”.
Consider Q1 2022 the Premium average was 2% and then in Q4 dropped to 0.7%. The drop was due to many factors, but historically there are more “last minute” traders in Q4, because they’ve been waiting for the Premium to get higher and now they are running out of time to use up their SDA + FIA.This congestion impacts the Premium and your profits significantly.
People want to set minimums because they want to maximize their returns, we get that, but “past returns do not guarantee future performance” and as such, many people are waiting, holding onto the hope that the Premium will come back to where it was in the “good old days”. Yes it might, but we encourage our clients to trade what is available today instead of trading hope and therefore risk running out of time and getting stuck in a historically low trading period (Q4).
Our objective is to preserve your FIA while getting the best available return that market allows. You have the luxury of waiting “timing the market” in the first 6 months, but If you have not begun trading by June / July, you will run out of time or land up trading a historically lower premium during Q4.
As of 1 June 2023, Cryptos are officially regulated by the FSCA. This means that anyone doing the arbitrage will need to be an authorized FSP (Financial Services Provider) and importantly will require the FSP to hold a “Cat 11” FSCA license, to trade on your behalf on a “discretionary” basis, to be able to book the FX and arbitrage simultaneously when the opportunity arises.
Regulation will limit the number of companies offering the arbitrage (which is good for the Premium), but what is not clear is the additional “new” participants entering at an institutional level. This could impact derivatives trading and peaked interests in Cryptos, driving large volumes and we may compromise the arb.
We have the flexibility to utilize stablecoins and cryptocurrencies based on the premium they offer when we make trading decisions. In the past, we have typically preferred stablecoins due to their higher liquidity and lower risk. However, there are instances where we can achieve greater profits by utilizing cryptocurrencies like Bitcoin. Importantly, our clients are not exposed to any volatility or price fluctuations in the crypto markets.
Andrew Ludwig (CEO) and David Farelo (CIO) co-founded CURRENCY HUB in 2018 and have extensive experience in financial services and asset management. Andrew heads up marketing while David is focused on trading and portfolio management. Both directors are regulated by the FSCA and SARB with the relevant qualifications to remain “Fit & Proper” according to the FAIS Act.
In 2023, 2 additional shareholders joined the board of directors, Warren Deats (CFO) and Ashton Hayes (COO).
Warren has a long career in markets trading and risk management having worked for Deutsche Bank, Goldman Sachs and Barclays in Africa, Asia and Europe. His experience as a Managing Director overseeing Cash Equity and Cross Product trading is vital to ensure we manage our risks appropriately.
Ashton’s career started in project management for digital marketing agencies, where he spent countless hours conceptualising and executing projects alongside designers and developers. Since then, he has been a keen entrepreneur with a particular interest in developing systems to optimize the performance of businesses. He discovered crypto arbitrage in 2017 and has worked alongside CURRENCY HUB since its inception to assist in developing their trading and operational systems.
A South African resident, who possesses an income tax number and is tax compliant, can participate in the arbitrage trade if they have either an NCR LOAN or trading capital of R250,000 or more to invest as working capital.
To do the arbitrage, there are strict documentation requirements for the SARS and SARB. Please review and have all the documents ready for a quick online onboarding: REGISTRATION GUIDELINES (FICA, SDA, FIA) and SOURCE FOR FUNDS.
Our services assist you through the operational hoops to ensure a smooth process.
BLACK ONYX FUND HUB Pty Ltd (trading as BLACK ONYX) was co-founded by founders of CURRENCY HUB and is as the exclusive the forex intermediary (6176) supporting CURRENCY HUB’s arbitrage service.
BLACK ONYX is an authorized financial services provider (FSP 50850), with the necessary FSCA licenses (Cat I & II) to perform the arbitrage on behalf of the CURRENCY HUB clients, all within the regulatory requirements of the FSCA and the SARB.
Have any queries, or need more information on our NCR LOAN solutions?
Powered by BLACK ONYX. An authorised financial services provider (FSP 50850) and FX intermediary (6176)
We are regulated and authorised by the FSCA to offer advice on crypto assets and provide an intermediary service.
We are a member of CAASA (The Crypto Asset Association of South Africa).