Bitfinex’s subsidiary Ethfinex Trustless on Monday announced the launch of an on-chain over-the-counter (OTC) service for trading digital currencies.
The announcement detailed that there is no centralized order book or matching engine maintained by the platform, so trades will be executed on a peer-to-peer basis.
We’re proud to unveil an important development in our decentralised offering - @ethfinex Trustless OTC, a Blockchain enforced Over-the-Counter service. Get started today https://t.co/iIFtnzdg5a pic.twitter.com/pKSFeHaiuP
— Bitfinex (@bitfinex) June 3, 2019
Customers can trade any digital asset on the OTC platform. However, there is a restriction on the assets which are classified as “financial instrument.”
“Customers can trade any ERC20 token, and even specify custom Ethereum addresses for tokens which are not currently listed on any exchanges,” the announcement stated.
The platform is also boasting a low fee which is kept at 0.02 percent.
“Ethfinex Trustless OTC revolutionizes this model by using the blockchain to enforce the deal in an atomic transaction. This market first removes the need for escrow, and opens up OTC to anyone through significantly lower fees at 0.02% (vs 2-5% on more traditional OTC desks),” the press release added.
In addition, there is no need for submitting any know-your-customer (KYC) documents, meaning trades will be executed anonymously. This, however, barred traders based in the United States and other restricted jurisdictions from using the platform.
Damage control?
This development came at a time when Bitfinex is struggling with its reputation in the market after serious allegations by New York Attorney General’s office.
The cryptocurrency exchange recently launched an initial exchange offering (IEO) platform along with Ethfinex.
“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,” Will Harborne, founder of Ethfinex Trustless, said. “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.”
