What KYC? First Trustless OTC Service on Ethereum Hits the Market
Ethfinex, Bitfinex’s hybrid cryptocurrency exchange for Ethereum’s ERC-20 tokens, has introduced a decentralized over-the-counter (OTC) service Ethfinex Trustless OTC. From now on, its users can trade large amounts of Ethereum tokens directly without relying on any third-party. It also solves the custody part of the trade, meaning that users don’t need to sign-up or pass the know-your-customer (KYC) procedure in order to trade.
Ethfinex launched in September 2018 and now has seemingly become the world’s first trustless OTC service that integrates into a centralized exchange. All trades are enforced by the Ethereum blockchain.
According to Will Harborne, the founder of Ethfinex Trustless, such OTC plays an important role in the further development of the cryptocurrency markets.
"Extending the capabilities of Ethfinex Trustless to include an OTC service is an important step in fulfilling the potential of decentralization in the cryptocurrency market. It opens the doors to those previously prohibited by expensive OTC desks, and provides security in blockchain enforced atomic deals. Customers no longer have to place trust in a third party, or take the risk of trades directly with the counterparty themselves," he was quoted as saying in a press release.
Meanwhile, Paolo Ardoino, Chief Technical Officer of Bitfinex, tweeted that "Custody and centralization of assets is definitely a big problem in our industry, the more users take care of their own assets the faster crypto-space will grow."
The token exchange works with any ERC-20 token, including tokens that are not listed on Ethfinex. It works the following way:
- You select an ETH token and how much you’re willing to pay.
- You choose the amount and token you want to receive.
- Ethfinex Trustless OTC generates a link to share with your trade partner.
- Your trade partner follows the link and completes the exchange.
Both parties are required to fulfill their obligations before the trade is settled, as smart contract governs the process. It also constitutes one of the cheapest OTC solutions in the market – it charges 0.02% fee per trade. There are no limits on trade sizes.
Ethfinex Trustless OTC is not available to the US citizens and individuals from some other restricted jurisdictions.
At the same time, Bitfinex has been making the headlines lately due to its initial exchange offering (IEO) platform launch, LEO token private sale, and legal battle with New York Attorney General (NYAG).