Bitcoin Forum
January 19, 2019, 09:36:35 AM *
News: Latest Bitcoin Core release: 0.17.1 [Torrent]
   Home   Help Search Login Register More  
Pages: [1]
Author Topic: [03-04-2018]OTC crypto market flourishes, powered by Skype  (Read 29 times)
Sr. Member
Offline Offline

Activity: 532
Merit: 388

View Profile WWW
April 03, 2018, 05:33:34 PM
Last edit: April 04, 2018, 03:19:14 AM by vit05

Trading firms are negotiating buying, selling and lending digital currencies like bitcoin and ether over Skype, catering to big investors looking to avoid rocking already volatile online exchanges.

FILE PHOTO: A web camera is seen in front of a Skype logo in this photo illustration May 26, 2015. REUTERS/Dado Ruvic/File Photo
Some 20 traders as well as clients such as wealthy investors, bitcoin miners, payment processors and, increasingly, hedge funds, have in around five years spawned an over-the-counter market moving hundreds of millions of dollars of cryptocurrencies daily, mostly via online messaging, participants told Reuters.

“Generally, you would go trade through an OTC desk when you have a large block trade you want to do without moving the market too much or incurring too much slippage,” said Kevin Zhou, founder of cryptocurrency-focused hedge fund Galois Capital. The traders work at firms including Chicago-based Cumberland Mining, a division of proprietary trading firm DRW Holdings; Goldman Sachs Group Inc (GS.N)-backed bitcoin payments firm Circle and New York-based broker-dealer Genesis Global Trading, owned by Digital Currency Group.

OTC trades are not reported and independently audited, but some dealers said their desks often handle more than $100 million of cryptocurrency trades daily with minimum ticket sizes between $75,000 and $250,000.

OTC trading may appeal to those wary of stashing coins and fiat currency with digital exchanges after high-profile hacks and other issues.

“When the big [exchange] hacks happen we tend to see business go up,” said an OTC trader who asked to remain anonymous.

The OTC transactions are settled through bank wire transfers and by sending cryptocurrencies to digital wallets.

To be sure, OTC trading carries its own risks to participants. Price discovery is murkier, and there is higher settlement risk. Clients also need to trust brokers to vet counterparties to avoid inadvertently helping launder illegal funds.

Genesis on average handles $75 million to $80 million in trades daily, 10 times year-ago volumes, Chief Executive Michael Moro said, and in December hit record monthly volume between $1.5 billion and $2 billion.

Boston-based Circle handled up to $4 billion in OTC trades monthly over the past year, spokeswoman Jennifer Hanley said.

Cumberland has been adding employees and opening offices in Asia and Europe, said global head of trading Bobby Cho. Cho previously worked at exchange itBit and SecondMarket, DCG’s Genesis’ predecessor. Most investors message traders directly, but are required by firms to undergo know-your-customer and anti-money laundering checks with their compliance departments, traders and investors said. Trades are settled bilaterally, generally by the firm’s back office.

“We needed a tool that was global and more or less free and Skype provided that,”
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
Hero Member
Offline Offline

Posts: 1547890595

View Profile Personal Message (Offline)

Reply with quote  #2

Report to moderator
Offline Offline

Activity: 1778
Merit: 1070

Be Revolutionary Or Die Trying

View Profile WWW
April 03, 2018, 06:10:34 PM

Where is the source link? Learn about formatting your posts, you don't have to share the whole article.
If that's true I would never do OTC trades via Skype, what a joke.

I am not interested in preserving the status quo; I want to overthrow it. Niccolò Machiavelli
Jr. Member
Offline Offline

Activity: 30
Merit: 2

View Profile
April 04, 2018, 07:40:32 AM

People will always find alternative routs to get the end that they want. As long as two people would like to do it the Skype way, they'll find a way to make it happen.  Before things got techy, one person could just easily go to his neighbor and negotiate an exchange of sorts. If they get to an agreement, they have a transaction. For most portable stuff, things other than Skype may already be in use as a vehicle for the processing of the transaction.
Pages: [1]
Jump to: is not available or authorized for sale. Do not believe any fake listings.
Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!