Binance Labs disclosed that it is investing $3 million in Koi Trading, which is an over-the-counter (OTC) trading exchange based in San Francisco, California. Though the amount is small for the biggest cryptocurrency exchange; it is a notable one considering that the overall market is struggling to hold its place. The move only demonstrated the confidence in the emerging asset class getting importance.
Private Crypto Liquidity
Binance Labs disclosed that the objective is to be a compliant option for digital coin liquidity since the OTC provides help in different dimensions. This included quantitative research, compliance consulting work and data science. The cryptocurrency exchange’s Head Ella Zhang, reacted to say, “Koi Trading’s mission is to bridge fiat and cryptocurrencies in a compliant manner. This aligns with our broader vision at Binance to build the infrastructure which provides the freedom of value exchange globally.”
Binance Labs believe that the American OTC firm is having an experienced founder’s team. This included Hao Chen, who is the CEO and founder. Chen indicated its team and sales personnel would do everything to tap into the wider network of North American territories apart from Asia and the European Union. The objective is to bridge the gap that separates the existing landscape of the OTC. The comments and investments assumed significance since there is a strong belief that once the market gets stabilized; there would be tremendous interest in virtual assets. Therefore, several firms are keen to take initiatives well in advance taking advantage of the existing depressing sentiments.
OTC In China
Though China has banned any activities in respect of cryptocurrencies and even slapped a ban on them, OTC trading is still prevalent in the country. Most of the OTC trading platforms in China are using WeChat, a chat app, for trading in OTC in the country. At the same time, the existing methods do not provide any professional or easy-to-use option that traders could trust. This is despite complications, as well as, regulations and crackdown on the emerging asset class sector.
Outside China too, the OTC market is booming despite the current bearish trend seen in the cryptocurrency market. For instance, Circle’s OTC clocked a turnover of over $100 million. Chen is banking on it strong AML program besides the wide banking relations in the United States. He also aims “to be the market nexus that reduces trust and information asymmetry.” Ultimately, he is keen to enhance the OTC for cryptocurrencies.