Trade Without KYC on Ethfinex’s New OTC Desk

Crypto exchange Ethfinex, a subsidiary of Bitfinex on Monday, announced on Twitter, the launch of a decentralized “trustless” OTC (over-the-counter) trading on its platform.

For the records, Bitfinex in September 2018, launched the Etheruem-token trading platform Ethfinex, which offered support and trading options for at least 50 ERC-20 tokens listed on its platform.

With the latest development today, the exchange will now operate as an agent, that will bring together the two-sides of trade, noting that trades are often brokered-off of most exchange’s main order book during over-the-counter trading.  

Another notable development is that the OTC trades will involve no third party escrow, which implies that the system will operate on a peer-to-peer mode.

Will Harbone, the Ethfinex co-founder, spoke extensively about what users can expect on the platform, saying,

“This is peer-to-peer exclusively, so buyers and sellers for the moment find each other externally, or are connected by agents, and then initiate the trade, generating a URL they can send to their trading partner to accept the trade.”  

The newly launched OTC desk known as Ethfinex Trustless got its name from its blockchain-based settlement system, Bitfinex said. The traders on the platform will have to reach out to others or by agents, express an intention to buy or sell before the transactions are closed through smart contracts.

“We don’t have custody of user’s funds…the custody is decentralized [until the trade is settled],” Harbone said.

Operationally, the trades will be enforced by the “blockchain” when accepted, with the fees at a minimum of 0.02%, noting that price for traditional OTC desks is usually 2% to 5%. The exchange also highlighted that the OTC desk could process trades for any “complaint” ERC-20 token, not only the ones currently listed on the exchange.

Interestingly, the Ethfinex Trustless OTC will not feature a signup process or Know Your Customer (KYC) process. However, users from the United States and other restricted countries are not allowed to the service.

Recently, Coinfomania reported that Bitfinex would distribute and allows its users to trade on its newly launched token dubbed UNUS SED LEO against other notable cryptocurrencies like Bitcoin (BTC), Ether (ETH) and more

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