Binance, one of the world’s largest crypto startup, has announced a $3 million investment in U.S.-based over-the-counter (OTC) trading desk Koi Trading. Koi Trading aims to be a top provider of private cryptocurrency liquidity, while also offering services related to data science, quantitative research, and compliance consulting work.
Strategic Alignment to Boost Binance
As reported by CCN via Yahoo Finance, Binance Labs selected Koi Trading as part of its goals to boost the freedom of exchange in cryptocurrency. Liquidity in crypto is still a pertinent issue, especially in a world where most vendors don’t accept BTC yet. Binance Labs chief Ella Zhang spoke on the investment, telling CCN the following:
“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.”
With the new investment, Koi Trading can focus on its stated goals as outlined by its founder, Hao Chen:
“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.”
The Binance And Koi Trading Collab May Bolster The Global Cryptosphere
OTC crypto trading is popular in some parts of the world, such as China, where regulations and complications make it difficult for cryptocurrency exchanges to operate.
WeChat, for instance, has gained a footing as a third-party OTC market in China. Circle has also reported individual OTC trades worth more than $100 million. However, the cryptocurrency market in China lacks professional exchanges that are both trustworthy and easy to use due to regulatory crackdowns.
By working with Binance Labs, Koi Trading could fill this gap by expanding into the global marketplace, while providing an alternative to services like WeChat. This partnership also provides an advantage over exchanges like Bitfinex, which has been criticized for its inability to keep a bank account open. Chen said of this advantage:
“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.”
While Koi Trading may not be a complete “magic bullet” to solve all of the issues with OTC trading, it may help regions like China, by providing an alternative to unregulated markets. Binance Labs’ investment will help provide the exchange with the resources needed to expand to a global scale.