Leading cryptocurrency exchange Binance has announced in a recent press release that it has invested $3 million in US over-the-counter (OTC) crypto trading desk Koi Trading. Based out of San Francisco, Koi Trading aims to be a compliant global operation for private cryptocurrency liquidity. The company also specializes in offering data science assistance, quantitative research and compliance consulting services.
“Koi Trading’s mission is to bridge fiat and cryptocurrencies in a compliant manner,” said Head of Binance Labs Ella Zhang. “This aligns with our broader vision at Binance to build the infrastructure which provides the freedom of value exchange globally.”
Koi Trading is headed by CEO and Founder Hao Chen, who stated his team is prepared to bridge an obvious gap dividing the OTC landscape:
“Our team of experienced traders and sales personnel will join forces to tap into vast networks of counterparties in North America, Asia and the EU, bridging the gap that divides the current OTC landscape.”
OTC trading has become increasingly popular in places like China, in the wake of the country’s outright crypto exchange ban earlier this year. CCN reports that the majority of China’s OTC cryptocurrency trading is coordinated through a Chinese messaging app called WeChat. This method of exchange, however, presents serious drawbacks, as it lacks the security and professionalism one would expect from a traditional exchange.
Binance’s partnership with Koi Trading aims to address the shortcomings in the current global OTC marketplace said Chen:
“With Koi’s robust AML program, extensive banking relations in the US, investment from Binance Labs, and strong trust amongst counterparties in the Greater China, we aim to be the market nexus that reduces trust and information asymmetry and improves cryptocurrency OTC deal close rate.”
The OTC boom has become a global phenomena in the last year. CCN reports that Circle’s OTC trading desk is regularly recording trading volume’s of over $100 million. A recent report by Bloomberg suggests that numerous large institutional investors from Wall Street are also quietly working through private OTC channels as a back door method of buying cryptocurrency. The report estimates that the OTC market facilitates anywhere between $250 million to $30 billion in trades per day, according to research from Digital Assets Researchers and TABB Group.
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