Today, Binance officially announced that it has launched a new crypto trading desk for over-the-counter (OTC) services.
Thanks to this trading desk, users will be able to exchange large quantities of cryptocurrencies and tokens listed on the exchange, using their Binance account.
This is not surprising: already in November, there were rumours that Binance would soon start offering OTC crypto services.
The service is useful for those who need to make large transactions, both because the prices of these trades are fixed and agreed upon directly between the parties involved and because in this way these transactions do not affect the prices on the exchange.
The new service allows trading only cryptocurrencies already listed on the Binance exchange, therefore excluding fiat currencies, and offers fast transactions of large amounts of crypto in individual trades, at a fixed price agreed upon between the parties involved in the trade.
It also guarantees a high level of privacy as these transactions are not visible in the order book of the exchange.
There are more than 80 cryptocurrencies that can be used for these trades, and the exchange promises simplicity and speed during the settlement processes. It also provides a large and diverse customer base and good liquidity.
The platform is not open to everyone, and to request access you must send an email, you must also have a verified Binance account of level 2 or higher, and place orders with a minimum value of 20 BTC, corresponding to about 72,000 dollars today.
Once the buy or sell orders have been placed, the platform will look for a counterparty willing to accept the trade and will allow the selling price to be agreed upon. In this way, the order will be executed in a single transaction at a price agreed between the parties, quickly, easily and securely, without interacting with the order book of the exchange.
In recent months, there has been a significant increase in OTC transactions, which are preferred by large cryptocurrency operators because they are less risky than exchange transactions.
In fact, it is not easy to execute fixed-price transactions of this magnitude on an exchange because there’s the risk of having to wait a long time before they are executed, without even being certain that they have been completed.
Alternatively, accepting the market price risks that the volume of the transaction itself affects the price, making it go down if you are selling, or go up if you are buying.
OTC trading, on the other hand, does not suffer from these problems.
Recently many other exchanges have decided to provide OTC crypto services including Bittrex, Coinbase and Kraken.