Chain Partners Officially Launches Digital Asset OTC Service
Partnered with top global OTC desks including Circle, a Goldman Sachs invested company
Chain Partners Inc. ( http://chain.partners, CEO Charles Pyo) announced it is officially launching a digital asset OTC (Over-The-Counter) service February 11, after finishing a test period of five months. Chain Partners opened its OTC website (https://otc.chain.partners) on the 11th as well.
Professional investors such as corporations, institutional investors, and high-net worth individuals are now able to make large buy or sell orders for digital assets (cryptocurrency), by trading through Chain Partners with minimum orders of USD 50,000. The OTC desk will also provide digital asset custody services backed by Chain Partners guaranteed deposits feature.
Using the service requires submitting more than 10 kinds of documents, which allows more thorough verification than what is required for regular bank accounts. All trading records are strictly and securely maintained for KYC and AML purposes. Settlement can be made with Korean won (KRW), or with other digital assets such as BTC, ETH, XRP, EOS, and different fiat currencies such as USD and HKD.
Chain Partners began preparing its digital asset OTC after incorporation in 2017, when it first noticed the trend in other international countries, where the digital asset industry focused on institutional investors rather than on retail investors.
Because there was no reference company yet in Korea, Chain Partners launched a test service in August 2018 after forming a business alliance with global OTC desks, completing a legal review, developing a trading process, setting up documents, and acquiring initial liquidity. During the five month test period ending this January, Chain Partners OTC has steadily accumulated know-how while succeeding with transactions worth around USD 16 million in Korea.
Last November, Chain Partners also acquired a Class 4 license, which is the highest digital asset license classification in the EU from member country Malta. This is significant because Chain Partners became the first Korean company to be able to legally deal with digital assets. The Malta parliament legalized the digital asset business by legislating the VFA (Virtual Financial Act) last August, a first of its kind in the world.
Chain Partners OTC was recognized in Korea for providing the first fully compliant digital asset over the counter trading service, and trading between seven of the top global digital asset OTC desks began during the test period. Among the OTC desks is Circle, which Goldman Sachs invested in. In comparison, Circle recently announced that they handled USD 24 million of digital assets trading volume last year.
Chain Partners OTC has also established a network with other global OTC desks such as US Cumberland, Galaxy Digital, HongKong OSL, Kenetic, FBG, Singapore QCP, and more, by which it is now possible to provide customers with the most competitive prices that cannot be found anywhere else in Korea. Moreover, they have widened the investment options for digital assets that are not yet available in Korea.
Also, Chain Partners OTC follows all regulations common with the traditional finance industry for legal trading activities. With the goal of executing on only legitimate trades with clear records from each counterparty, the OTC desk aims to maintain the finance industry standard for KYC (Know Your Customer) and AML (Anti Money Laundering). In order to achieve this, Chain Partners OTC has formed a partnership with Argos, a KYC/AML specialized company. In addition, the Chain Partners OTC team is composed of only professionals from the traditional financial industry and those who have sales and settlement experience with institutions, thereby increasing trust from institutional investors.
Chain Partners OTC has developed, in close cooperation with domestic and international law firms, a 10-document application process to bring a level of bank-grade verification to the industry. Jake Lee, Head of OTC, who worked previously as a FICC (Fixed Income, Currency, Commodity) trader at NH INVESTMENT & SECURITIES CO.,LTD., explained that “It is necessary to conduct trading with clear records in order for the protection of both buyers and sellers.” Adding: “Our motivation is to create a fully compliant digital asset OTC market.”
Charles Pyo, the CEO of Chain Partners, said “Chain Partners’ goal is to create a fully compliant digital asset OTC trading environment, which has previously been a hotbed of money laundry and tax evasion. The goal is to construct a healthy digital asset ecosystem.” He added: “We will contribute a solid trading infrastructure that allows Korean institutions to deal with digital assets at the same quality as if abroad.”
Meanwhile, the OTC trading desk provides buyers and sellers with a marketplace for agreed prices, not determined by the open market prices on exchanges. Unlike exchanges where the price changes in real time, with added liquidity risk from the trading volume, Chain Partners OTC trading makes it possible for institutions and high net worth individuals to trade at preferred, fixed, and negotiated prices.
In a recently released report, Chain Partners proposed standards for evaluating trustworthy OTC desks based on the following criteria: whether KYC and AML rules are strictly adhered to; if there are guaranteed deposit and custody services; and if there are financial experts operating the OTC service. Chain Partners has estimated that the size of OTC trading market is around 25% of the entire digital asset trading volume, which is USD 40 billion per month worldwide.
Chain Partners OTC?
Chain Partners OTC is the first fully compliant digital asset OTC Trading desk in Korea. The OTC desk established its network with the top seven global OTC desks including Cumberland, FBG, Galaxy Digital, Kenetic, OSL, and QCP. It officially launched trading services on February 11, 2019. Member application and trading inquiries are available at Chain Partners OTC website (https://otc.chain.partners).