Binance.US, the leading cryptocurrency exchange company’s US-based division, has introduced an over-the-counter (OTC) digital asset trading desk.
The new OTC option is only available for trades valued at $10,000 or more.
OTC crypto trades are negotiated directly between the buyer and the seller. They don’t go through the centralized exchange’s publicly accessible order books.
OTC traders allow for the movement of large amounts of money, and usually offer better privacy than regular trading through a centralized platform.
OTC trades might also not affect price movements in the crypto market, as much as normal trading.
Binance.US’ OTC desk will support 12 major cryptocurrencies. It will also allow traders to use US dollars, however, withdrawals in USD may only be performed by traders who have cleared Level 3 Fiat Verification, which is a fairly strict Know Your Customer requirement.
All settlements from OTC trading are deposited to traders’ Binance.US accounts.
While the exchange doesn’t take commission for OTC trades, there will be spreads, meaning that the rates quoted by Binance could be either lower or higher than the market rate. The price will depend on whether the trader is buying or selling
Binance launched its US-based operations in September of last year.
Trading via Binance.US is available to the residents of most US states, with the exception of Alabama, Alaska, Connecticut, Florida, Georgia, Hawaii, Idaho, Louisiana, New York, North Carolina, Texas, Vermont, and Washington.
A report from B2C2, an OTC liquidity provider, revealed that OTC trading experienced very high levels of volatility during the March 12-13, 2020 crypto market crash – which saw the Bitcoin order spreads go over 10% when BTC’s price dropped by around 50%.