This week, Binance Labs announced that their venture wing would invest $3 million in Koi Trading, the US-based OTC crypto trading desk. This is quite a small figure for the largest crypto exchange in the world. However, it is still noteworthy.
Koi Trading Mission
Koi Trading is an OTC trading desk that has its headquarters in San Francisco, California. They seek to be a compliant global option for private crypto liquidity. Koi offers assistance with quantitative research, data science, and compliance consulting.
Commenting on the decision to invest in Koi, the head of Binance Labs said that the trading mission of Koi was to bridge crypto and fiat within the law. This is in perfect alignment with the vision that the Binance exchange has for the world. Their aim is to offer the world infrastructure to ensure freedom of value exchange.
Koi’s team of founders is quite experienced. For instance, the CEO and founder is pretty much an expert in finance and crypto. He said the team of traders and other personnel at Koi would work together to tap the vast counterparties network in the US, EU, an Asia. As a result, they will be able to bridge the gap that divides the existing OTC world.
OTC In Crypto Markets
OTC trading has taken root in China. This is especially so after exchanges were banned in the nation and other regulatory complications. In the current market, most OTCs in China for crypto rely on the WeChat app to coordinate their activities. This leaves those taking part without an easy option, which has trust.
The Binance Lab partnership with Koi will ensure that the trading difficulties for crypto OTC trading can be resolved globally. As a result, clients will have a better option. According to the Koi CEO, their robust AML program and extensive banking connection in the USA will come into play in their work with Binance Labs. They have also developed trust with Chinese counterparties. Koi wants to be the market nexus that will reduce the lack of information and trust and improve crypto OTC deal closing.
The OTC market is huge outside China and it is booming despite the current bear run. In an earlier report, it was reported that Circle’s OTC crypto trading desk was seeing trades as large as $100 million.
Who Can Use Koi To Trade?
Koi is open to all high-net people who wish to trade large amounts of crypto. They will at times trade with other counterparties on a discretionary basis. They rarely reject account requests unless they are a monitored or high jurisdiction according to FATF identification.
For instance, they are amongst the few OTC trading desks that accept Chinese institutions and high net worth people. Because of the overwhelming demand, they are only accepting counterparties that have monthly volumes above USD 500,000.
The OTC trading desk will only accept those that undergo via an AML and KYC process. They want to be on the right side of the law at all times.