The FinanceFeeds Podcast, hosted by Editor-in-Chief Nikolai Isayev, has released Episode 34 featuring an in-depth conversation with Torben Friis, Managing Director and Head of Distribution at Match Liquidity DMCC.
The discussion explored Friis’s extensive career in the financial sector, the evolution of the brokerage industry, and the never ending rise of Crypto.
How the brokerage industry evolved
Friis began by sharing his journey from Saxo Bank in 2001, where he worked alongside founders Kim Fournais and Lars Seier Christensen. He recounted his experiences during a time when online trading was still emerging, revolutionizing retail investment.
“Previously, people who had been trading these kinds of instruments like foreign exchange or commodities, whatever it might be, would either have been wealthy individuals who did it via phone broker or something equivalent. But the online component totally changed that mechanism, and I had the pleasure of working directly for Kim Fournais and Lars Christensen, the two founders of Saxo Bank.”
His career trajectory included roles in asset management in Lugano, contributions to IG Group’s European expansion, and eventually leadership roles in various financial and retail ventures. Reflecting on this era, Friis remarked on the rapid technological adoption and market expansion facilitated by platforms like MetaTrader.
Throughout the conversation, Friis provided insights into the shifting landscape of the brokerage industry. He emphasized the growing challenges for smaller and medium-sized brokers to remain competitive, noting that without substantial capital and sophisticated marketing, breaking into the top tier is increasingly difficult. He highlighted the marketing prowess required in today’s environment, referencing a past conversation with XM.com founder Tasos Papanastasiou, and illustrated the intricate financial barriers, such as the high marketing cost per acquisition (CPA) that brokers face.
“So when you were talking about the heyday 20 years ago, and then let’s just turn the clock back 15 years ago or 10, you know, that window of opportunity has entirely closed by now. Anybody who wants to set up a brokerage will understand that the capital they will need to allocate, the compliance and operational cost they will face, and the risk of attracting toxic clients—both in retail, corporate, and wholesale—are very high. So for a lot of these people, I think it will be a very, very demanding feat to try and get into that, and that’s perhaps also why you’re seeing a lot of people who have, let’s say, cut their teeth in foreign exchange or retail brokerage moving into things like crypto or even the payments industry.”
Discussing market trends, Friis commented on the migration of seasoned professionals from traditional FX and CFD brokerages to industries like cryptocurrency and payments. He explained that the competition and rising costs in the brokerage sector have driven many to explore these new avenues.
How brokers manage risk in leveraged trading
The episode also addressed the impact of high leverage offerings in retail trading and the growing risks brokers face when managing large volumes without adequate hedging.
“The first thing we have to be conscious of, as always when looking at leverages, is the fact that leverage is a symptom of what customers really want and which effect that will have on the broker. So if there’s a broker out there who’s offering 200 to 1, it’s not because they naturally want to. They don’t expect the customer to be winning, because as you were just pointing out yourself, the ratio they can get with a prime broker or a direct banking relationship will at best be 20 to 1 in an extreme scenario, with 5% margin. And as you pointed out, sometimes it’s as high as 8% margin they have to come up with.”
Touching on gold’s continued popularity among retail investors, Friis explored the disparity between the leverage brokers offer and the stricter margin requirements imposed by prime brokers. He broke down the mechanics behind leverage and hedging strategies, describing how high leverage can lead to significant risks for brokers, especially if they lack the ability to net opposing client flows. He suggested that the industry’s structure might prompt further consolidation, as smaller players struggle to maintain financial stability amid these pressures.
“And then, you know, I’ve noticed that gold accounts for nearly half the volume for a significant number of FX and CFD brokers. But there’s quite a mismatch between the leverage they offer, which can go up to, let’s say, 200 to 1. And PBs or prime brokerage’s margin requirements are about 12.5 to 1.”
A national Bitcoin reserve in the US?
Their engaging conversation also touched on U.S. crypto policy, institutional adoption, and the strategic advantages of operating in the UAE.
Friis shared his perspectives on the U.S. regulatory landscape, emphasizing how lobbyism influences policymaking. He mentioned that despite some policymakers’ skepticism, recent political figures, including Donald Trump, have voiced surprisingly supportive statements on crypto.
”Trump has said that they want to create a national Bitcoin reserve. He mentioned instructing law enforcement to retain seized Bitcoin, and I reckon that they will, in no time, draw up somewhere between 50,000 to 100,000 Bitcoin every year as part of that strategy. That’s just my gut feeling, looking at the current trends. With the increasing political support for blockchain and the decentralized aspects of Bitcoin, it would not surprise me at all if the government starts to accumulate Bitcoin as a hedge against the dollar’s declining value, especially with the inflationary pressures and ongoing fiscal policies.”
However, Friis issued a cautionary note, expressing concerns about rampant fraud and scams in the sector. “Ninety-five percent of everything that happens in crypto is absolute nonsense,” Friis stated, highlighting the need for a more grounded approach to crypto.
The conversation also explored the role of crypto in international payments, particularly in emerging markets. Friis noted that many brokerages in regions such as China, India, and parts of Africa and South America are shifting client transactions from traditional methods to crypto, driven by the inefficiency of alternatives like credit card payments and bank transfers.
On a global scale, Friis described how institutions increasingly embrace blockchain technology for settlement processes. He cited examples like JPMorgan’s JPM Coin, used internally to reduce costs.
“Most people don’t realize how much banks actually are involved with blockchain as a technology for the sake of mapping transactions. It’s not just about crypto as a speculative asset, but about using blockchain technology for internal settlements. JPMorgan, for example, runs their entire internal settlement infrastructure on this already, because it’s much cheaper running that on blockchain nodes than huge server parks by Oracle or IBM. So it’s already being used to transform the back-end of how transactions are recorded, settled, and tracked, and it’s becoming a core piece of the financial infrastructure in the US.”
Friis predicted that the future will see regulatory mandates requiring brokerages to map transactions on blockchain, revolutionizing transparency and accountability. However, he also speculated that major crypto exchanges could face obsolescence as traditional banks adopt blockchain technology for mainstream finance.
“The future of crypto technology lies with traditional finance,” Friis stated. He suggested that DeFi innovations might still hold potential, driven by academics and tech visionaries, but the majority of crypto usage will integrate into established financial institutions.
The rise of Dubai and Abu Dhabi
Discussing Match Liquidity’s base in Dubai, Friis praised the city’s strategic advantages, such as zero income tax, a favorable regulatory environment, and high living standards.
“It is a place where people feel a lot of stuff can get done, and in general, the authorities are also very accommodating. You deal with the banks, and they will be strict on KYC and AML, although there have been rumors about other things. But the FATF removed the UAE from the gray list in February this year, which is confirmation that the authorities are serious about compliance. If you look at it from a time zone and geographical point of view, the UAE literally sits on the cusp between West and East, right? It’s a time zone that allows you to handle both markets efficiently. From a cultural and operational standpoint, it’s very open and business-friendly. That’s why I think Dubai will grow even further than it already has.”
He observed that, while Dubai remains popular, Abu Dhabi is emerging as a strong competitor. The Abu Dhabi Global Market (ADGM) is rapidly developing into a key financial zone, supported by significant government investment and ambition.
“A lot of people are of the impression that Dubai is so crowded. But if we take an example, all the people who have a say in things related to finance, they don’t sit in Dubai; they sit in Abu Dhabi. All the movers and shakers I have met beyond the powers that may be in Dubai, I have met in Abu Dhabi. So if you’re asking why it’s a good place to set things up, it’s because it’s open for business. The authorities in Abu Dhabi are strategically aligned to support and grow the financial services sector.”
Both hosts agreed that the UAE’s regulatory foresight has positioned it as a key player in global finance. As Friis put it, “Dubai and Abu Dhabi are not just financial centers but catalysts for hypergrowth in the trading and crypto industries.”
Match Liquidity is hiring
As the discussion unfolded, Friis elaborated on his upcoming participation at Sigma Malta, a prominent conference for the iGaming and online gambling sector. He highlighted the strategic relevance of attending such events, stating that these conferences are invaluable for observing new trends and exploring high-risk, high-reward investment opportunities. “Nobody’s got the kind of profit margins that these guys have,” Friis emphasized, mentioning that financial projects that many would overlook often gain traction from the bold financial backing seen in this space.
Looking forward, Friis also discussed Match Liquidity’s focus on expanding its distribution team and its operational reach in burgeoning financial hubs like Dubai. “We will most likely be looking to strengthen our distribution team even further. So if there’s somebody with good qualifications who knows the industry well, they’re more than welcome to hit me up on LinkedIn, and we will gladly entertain them on that part. Other than that, as you said, the UAE, Dubai, [is] growing really fast. So I’ve got to be spending a lot of time down in the sandpit and then going between Europe and Asia.”
Listeners can expect to gain valuable perspectives on how Match Liquidity is navigating the rapid changes in the financial markets, with Friis offering a glimpse into strategic moves and emerging opportunities as the year wraps up.
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