Huobi Technology, which is owned by Huobi exchange’s CEO and chairman Li Lin, is set to launch its over-the-counter (OTC) trading service for digital assets.
The Hong Kong-listed firm has rolled out its OTC trading desk through its fully-owned subsidiary, Huobi Brokerage. The new service allows the execution of block transactions on a large variety of cryptocurrencies, stablecoins and fiat currencies.
The Huobi OTC desk, which facilitates dealing between trade parties directly, instead of relying on the supervision of an exchange, joins similar services at other top US crypto businesses.
Coinbase, Poloniex, Gemini, and Circle have already started their over-the-counter trading operations years ago. The OTC business complements those exchanges’ underlying services as many institutions were already using OTC as a proxy for crypto trading.
Despite price volatility, the move shows how the cryptocurrency space is maturing in a similar way to the $6 trillion foreign exchange market.
Upon launch, the service supports the US dollar in trading operations, but it promises to add other major currencies such as euro, British pound, and Hong Kong dollar in the near future.
A complaint service
Some clients have been invited for trial operation for the crypto OTC trading, and now the service is officially open to eligible clients. Huobi would act typically as an agency and earn commission by executing client trades.
Huobi Tech’s OTC platform finds willing buyers and sellers without tipping off the market that a big order is coming. Huobi will then get price quotes for the client who, in this case, needs to confirm that he accepts the offered settlement price for the transaction. In the last step, the OTC desk will execute the trade and settle funds or cryptocurrency into Huobi account within a certain time of receiving the client’s deposit.
Huobi Brokerage explains that it implements hierarchical risk control measures with reference to the AML requirements under HK regulation, to ensure secure and compliant service delivery.
Commenting on the news, Simon Wu, CEO of Huobi Tech, said: “After the launch of crypto-backed lending, Huobi Brokerage now offers the virtual asset OTC trading service that is low-price, convenient, compliant and secure, further enriching its line of business. Huobi Tech will continue to diversify its businesses in the future, with Huobi Brokerage as one of our key business sectors in tapping into digital asset financial services. We believe Huobi Brokerage business would grow with Huobi Tech’s other virtual asset services for synergic development.”