“Regulators in Europe, the US, and as of yesterday, Hong Kong are looking into whether the $4.7 trillion market for currency is being manipulated by a handful of traders in order to gouge their clients and pocket big profits. At face value, it seems impossible that a handful of traders could have a sizable impact on a market so massive. But if currency traders were conferring in group chats (paywall) over how to time their trades to game the system, then they very well might have been able to pull off this heist. (There’s no clear evidence as yet that this happened.)

“Companies—including asset managers that invest your retirement savings—trade currency for a few reasons: to hedge their investments overseas, conduct transactions in different currencies, or generally make long-term investments in one currency as opposed to another. To do this cheaply, big companies typically use bank traders to get the right price and make sure their sizable trades run smoothly.

“Until recently, the foreign exchange market was an incredibly opaque place. Currencies are traded over-the-counter—or between individual dealers—rather than through a centralized clearing house or exchange (as with stocks, for instance) that processes and time-stamps trades. That made it difficult to see what the price of a currency pair was at any given time, and difficult to know, after making an exchange, that you’d gotten the best price.”

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Read full Quartz article here