Privacy Policy
OTC Policy
KYC
Refund Policy
Risk Warning
T&C

Definitions

1. Bitcoin is a digital currency created in January 2009. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.

There are no physical bitcoins, only balances kept on a public ledger in the cloud, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments.

2. Etherium is an open source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality. Ethereum was proposed in late 2013 by a cryptocurrency researcher and programmer. Development was funded by an online crowdsale that took place between July and August 2014. The system then went live on 30 July 2015, with 72 million coins "premined". This accounts for about 68 percent of the total circulating supply in 2019.

«Ether» is a fundamental token for operation of Ethereum, which thereby provides a public distributed ledger for transactions. It is used to pay for gas, a unit of computation used in transactions and other state transitions. Mistakenly, this currency is also referred to as Ethereum.

It is listed under the ticker symbol ETH and traded on cryptocurrency exchanges, and the Greek uppercase Xi character (Ξ) is generally used for its currency symbol. It is also used to pay for transaction fees and computational services on the Ethereum network.

Why OTC?

Liquidity on cryptocurrency exchanges is often low or volatile, thus making it difficult to exchange large amounts when needed. If a large buy or sell order appears on a centralized exchange’s order book, it is unlikely to get filled immediately at the price requested. The order may even be broken up into smaller orders at different prices, an unfavorable phenomenon called price slippage. OTC brokers eliminate slippage and provide liquidity to cryptocurrency markets by matching buyers and sellers through their developed networks at a mutually agreed-upon fixed price.

Many traders have expressed interest in the ability to make larger trades directly with a counterparty without having to go through the public order books.

OTC desks also provide anonymity that is often impossible to achieve on a centralized exchange. For example, if a large buy order of 1,500 BTC were placed on an exchange such as Coinbase, this could alert other traders and move the price of the asset. The anonymity of a large over-the-counter trade prevents such unwanted price movements.

Centralized exchanges also make it difficult to trade large amounts due to order limits or the lack of fiat on-ramps. OTC desks enable customizable direct trades between buyers and sellers, without the restrictions present on exchanges.

To make that possible, we would like to announce the launch of our new Over The Counter (OTC) Trading Desk for BTC (Bitcoin) and ETH (Ether). Through our OTC desk, traders will be able to access digital currency liquidity without affecting the exchange market price.

Our customers make deals for huge amounts of money, so we are responsible for them. To ensure maximum security, all the counterparties undergo the mandatory KYC procedure to make sure that all of our customers follow with AML rules.

Why would I use OTC trading instead of a crypto exchange?

Why would I use OTC trading instead of a crypto exchange?

If you are seeking higher liquidity, combined with a decent level of anonymity, OTC trading might be an elegant solution for you.

Let’s imagine you are trying to sell a noticeable amount of altcoins you saved from the early crypto years. Most importantly, you would be seeking high liquidity for your assets. The experts agree that major exchanges usually have lower liquidity than what is ideal. This is why you might rather use OTC trading if you are looking to invest more.

The second key goal for a trader is to minimize the impact on the market as a consequence of a large deal. This point is relevant mostly for those who are looking to buy or sell thousands of bitcoins. If you apply to OTC trading, the transaction is performed directly and does not show up in order books, which is why it will not affect the price.

Moreover, if you are investing in a lot of bitcoin or any other crypto asset, you might want to protect your identity and keep the deal anonymous. In this case, skipping the services of major exchanges and purchasing the assets directly from a counterparty is a nice way to avoid unnecessary attention and keep the deal to yourself.

Summary

The BitExChain carries out the identification and examines the Partner with whom it enters commercial relations prior to the provision of any product or service or establishment of any business relationship, effectively preventing the legalization of proceeds from crime and the financing of terrorism.

The BitExChain has established a Know-Your-Client (KYC) procedures for OTC Trading to ensure that identification of all new and existing Partners was verified with a reasonable level of certainty.

On the onboarding stage, mandatorily before the establishment of business relations and performing any transactions, BitExChain identifies its Partner by means of documents of evidentiary value and based on information obtained from reliable and independent sources.

KYC:

On the onboarding stage, mandatorily before the establishment of business relations and performing any transactions, BitExChain mandatorily requires the OTC Partner to fill in and sign the developed onboarding form with the following information:

Company Information PEPs & Contacts Funds Others
Company name PEP status/connection S Source of funds and origin of funds Tax residency
Registered address, Contact details (website, mail address, phone numbers) Complete information regarding ownership structure and UBOs Estimated transactions volume in EUR per month BTC address for corresponding transaction(s)
Company registration number Register of directors/managers Type of business and the purpose of establishing business- relations

Documental request:

In order to clarify, check and verify the provided information regarding the client, The BitExChain requests the following documents together with the duly filled and signed OTC onboarding form:

Certificate of Incorporation

Recent Certificate of Good Standing/Recent Certificate of Incumbency/Recent extract from the Companies register of the respective jurisdiction which contains share allotment details, management details and legal status of the company

Articles of Association/Organization or Memorandum of Association

VAT ID (if applicable)

Shareholder Certificate/Register of Shareholders Certificate of appointment of Director/Register of Directors

Copy of Business/Operating License/link to the license on the regulator's website (if applicable)

Organization Chart / Company Structure (Shareholders, etc.)

Scanned Copy of Ultimate Beneficiary Owner(s)

passport of: Director(s) and/or Authorized signatory(s)

Copy of utility bill: Ultimate Beneficiary Owner (UBO)

Bank reference Scanned copy of a bank statement and Scanned printout from Internet bank

Website :

1. URL

2. Test login (User/PW)

Documental request:

If company deems that sharing it is necessary to enforce the Terms of Service; In case of reasonable doubt regarding the Partner, discovered adverse media which may have a connection to a Partner and/or UBO/Director of the Partner or any other grounded concern of necessity of receipt of the additional information in order to assess the risk score of Partner, The BitExChain shall demand that a Partner and/or UBO/Director of the Partner to provide additional information/documents related to:

business activity/business model and financial status of the Partner and/or UBO;

detailed information and documental confirmation of the source of funds and actives;

the purpose of establishment of the business relationship and the purpose of the transaction in question.

After receipt of the necessary information and documents, BitExChain proceeds to the onboarding decision stage.

Information Check, Additional Information Search and Onboarding Decision:

The BitExChain will examine the provided information and documents in order to

Identify the Partner. The BitExChain will use reliable and objective documentation, data and information to identify and verify its Partner.

Identify the Ultimate Beneficial Owner of the Partner. The BitExChain will verify the identity of the ultimate beneficial owner of the Partner with whom it enters into commercial relations.

Identify the Source of Funds. The BitExChain will obtain the documental confirmation of the source of funds of the Partner.

Understand the purpose of establishment of Business Relationship. The BitExChain will obtain information on the purpose and intended nature of the business relationship

After obtaining all the necessary documents and information, based on the risk assessment policy, available information and independent research via open sources performed by the CO and information service providers, The BitExChain shall categorize the Partner’s dossier in one of three risk categories: Low risk, Medium risk or High risk and proceed to establishing legal binding business relations.

The following risk categories are used to define the risk score of the Partner:

(1) Customer risk; (2) Geographical risk; (3) Product risk; and (4) Delivery channel risk.

Depending on the level of risk, Enhanced Due Diligence, allowed transaction limits, information update and transactions monitoring procedures will be applied to the Partner in future.

The “Company name” will monitor its Partners using PEP lists provided by data providers and applies EDD measures in case Partners are identified as PEPs, their family members or close associates.

The Company will perform screening against the following sanctions lists:

UN Sanctions;

EU Sanctions;

Sanctions administered by the Office of Foreign Assets Control (“OFAC”);

Sanctions imposed under the (Local jurisdiction sanctions act).

In case Partner’s dossier is categorized as Prohibited, the process of establishment of business relations is stopped and all the negotiations are ceased.

In case CO decides that the Partner’s dossier documents and gathered information show reasonable suspicion of involvement in illegal activity and/or terrorist financing, internal suspicious activity report will be tendered to the CCO for consideration of SAR (suspicious activity report) tendering.

Transaction execution/transaction monitoring:

The BitExChain will not execute transactions to third-party’s beneficiaries.

In order to clarify and check the provided information regarding the Partner, BitExChain will carry out ongoing monitoring of Partner’s transactions.

The BitExChain will execute transactions according to earlier provided payment details and/or BTC addresses only. Any changes in payment details and/or destination/beneficiaries will be executed via beforehand notice to the BitExChain and further information update of the Partners dossier.

The first step in any OTC transaction is finding a counterparty for the trade. The next step is to negotiate the terms of the trade. If you’re looking to buy BTC, for example, you may wish to specify the following:

The amount of BTC you want to buy

When you want the trade to take place

Your desired price

The seller will then respond with their offer price for the transaction, which will often be expressed as a percentage above a leading exchange’s best available price – for example, Exchange ABC + 1%. Of course, the exact negotiation process will vary depending on whether you’re the buyer or the seller, the medium you’re using to arrange the trade, the size of the transaction and whether you have any leverage.

Once a price has been agreed upon, the buyer sends a bank transfer to the seller to cover the purchase price, and the seller sends the relevant amount of crypto coins or tokens to the buyer. Depending on where both parties involved in the trade reside, they may also need to complete KYC (Know Your Customer) due diligence on each other to make sure they satisfy legal requirements.

Ongoing monitoring:

The BitExChain will conduct ongoing monitoring of business relationships with Partners, to ensure that the documents and information held are kept valid and up to date.

The BitExChain will conduct ongoing monitoring for all business relationships with Partners. This will be done on the same basis as the CDD conducted when the business relationship with the Partner was established and taking into account the level of risk involved.

The BitExChain particularly involves regularly reviewing and refreshing Company’s view of Partners dossier, their risk score, and whether anything is inconsistent with information previously held about the Partners. It can also include anything that appears to be a material change in the nature or purpose of the client’s business relationship with BitExChain.

Reporting:

After CCO has received the internal suspicious report from the CO, CCO will review it and take steps to validate the suspicion in order to judge whether or not a SAR should be submitted to the respective government agency. In case CCO decides that the suspicion of involvement in illegal activity and/or terrorist financing is grounder and objective, CCO tender’s SAR to the respective government agency.

Record keeping:

The BitExChain will retain all records relevant to its AML Program including those related to Know-Your-Client (KYC) procedures, carried transactions and all business correspondence relating to business relationships with Partners, for a period of not less than five years after the termination of business relations.

What are the problems with OTC?

Settlement risk - there is no guarantee the asset will be delivered, or cash will be paid. Coin transfer often happens much faster than the wire payment transfer (often by several hours). No custody solution - most OTC brokers don’t provide a custody solution (or provide a very limited service), which can increase settlement and operational risk. Multi-jurisdictional KYC issues - dealing with countries with poor.