Binance Labs Invests $3 Million in SF based OTC Trading desk

Koi Trading
Jan 25 · 3 min read

SAN FRANCISCO, CALIFORNIA — Binance Labs, the investment and incubator arm of the world’s largest cryptocurrency exchange Binance, has just announced a $3 million investment in cryptocurrency OTC trading company Koi Trading.

Binance Labs and Koi Trading

Koi Trading is an OTC trading desk based in San Francisco that provides private, efficient and compliant cryptocurrency liquidity to counterparties around the world. With specialization in cryptocurrency OTC trading, global market making for crypto exchanges and high-frequency trading, Koi Trading also provides support services such as quantitative research, data science, and compliance consulting services.

“Koi Trading’s mission is to bridge fiat and cryptocurrencies in a fully compliant manner. This aligns with our broader vision at Binance to build the infrastructure which provides the freedom of value exchange globally,” said Ella Zhang, Head of Binance Labs. “The Koi Trading team is dedicated to making a positive impact and we are excited to welcome them into the Binance Labs family.”

One of the key determinants of the investment is Binance Labs’ strong belief in the Koi Trading founding team. Ella believes the founders are “key influencers in the industry and long-time blockchain believers with deep knowledge in both the technology, OTC operations as well as the regulatory space. They have dedicated themselves to making a positive impact on the ecosystem.”

Koi Trading’s founding team consists of three former core team members of Huobi US and are well-known blockchain industry investment, technology, and compliance veterans.

“The reason why we decided to move on from Huobi US to start an OTC trading desk is that, when building the formal crypto exchange, we figured 80% of the profits come from around 5% of the institutional customers,” said Jimmy Cai, the head of Business Development of Koi Trading “Building and running an exchange requires a strong operations and marketing team. With a rather small team, we are able to serve the 5% with better quality service while acquiring 80% of the profit.”

“Our team of experienced traders and sales personnel will join forces to tap into vast networks of counterparties in North America, Asia and the EU, bridging the gap that divides the current OTC landscape.”said Hao Chen, the founder and CEO of Koi Trading, “We are thrilled that Binance recognizes our team’s unique ability to deliver this vision; we cannot wait to build a reliable and professional brand around the globe in partnership with Binance.”

OTC Prevalence in Cryptocurrency Markets

OTC trading for cryptocurrency is no cakewalk business in the current cryptocurrency bear market. But even with the placid trading levels and several big players already in the field, Koi still finds underserved clientele in both China and the US. OTC trading in China boasts a significant daily volume of at least RMB 150 million despite the broad-based ban of centralized cryptocurrency trading in China. Without trusted escrow agents, most of OTC trades in China are arranged through WeChat, a Chinese instant messaging app. So the counterparties in China always find it difficult to secure a professional, trustworthy and user-friendly service provider. “With Koi’s robust AML program, extensive banking relations in the US, preferred access to Binance’s cryptocurrency escrow wallet, and strong trust amongst counterparties in the Greater China, we aim to be the market nexus that reduces trust and information asymmetry and improves cryptocurrency OTC deal close rate.” Said Chen.

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About Binance & Binance Labs

Binance Exchange is one of the fastest and most popular cryptocurrency exchange platforms in the world, capable of processing over 1.4 million orders per second. Founded in 2018 as the exchange’s investment and incubator arm, Binance Labs is a social impact fund and an initiative to incubate, invest, and empower blockchain and cryptocurrency entrepreneurs, projects, and communities.

About Koi Trading

With desks in San Francisco, Hong Kong and Beijing, Koi Trading offers a private, efficient and compliant OTC pathway for institutional investors and wealth managers to start engaging with blockchain assets. Using a combination of trade algorithms and direct communication channels, Koi Trading connect OTC counterparties with deep liquidities and earn price arbitrage as a near-riskless principal. For more information, please visit https://koi.trade/.

Koi Trading

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• Koi Trading is an OTC trading desk that provides private, efficient, and compliant cryptocurrency liquidity to counterparties around the world.