A Crypto Trading Clampdown Expands Beyond Binance to Another Large Exchange

Cryptocurrency
exchanges
are
cracking
down
on
brokerages
that
bundle
clients’
orders
to
enjoy
lower,
VIP
trading
fees.

In
a
letter
reviewed
by
CoinDesk,
OKX,
the
second-largest
exchange
by
volume,
recently
asked
prime
brokers
for
details
of
subaccounts
including
the
names
of
the
entities
or
individuals
that
control
each
subaccount
and
the
jurisdiction
in
which
they
are
located.
OKX
said
it
needs
the
information
by
July
17.

“A
failure
to
do
so
may
result
in
undisclosed
subaccounts
being
restricted
from
trading
and/or
subaccount
closure,”
the
letter
said.

Earlier
this
month,
OKX’s
larger
rival
Binance

changed
its
Link
Plus
interface,
effectively
closing
a
loophole
that
let
prime
brokers
use
a
multitiered
fee
system
to
offer
rebates
to
clients.
Binance
said
the
measure
was
“to
uphold
compliance
and
ensure
a
level-playing
field
for
all
users,
whether
they
access
Binance
directly
or
via
an
intermediary.”
That
news
was
first
reported
by
Bloomberg.

Exchanges
offer
their
biggest
customers
discounted
trading
fees,
treating
them
like
VIPs
to
boost
the
odds
they’ll
stick
around.
Prime
brokerages
–
firms
that
provide
trading
services
for
professional,
and
often
large,
investors
–
could,
in
theory,
funnel
several
customers’
trading
through
a
single
account
at
an
exchange,
qualifying
for
those
lower
fees.

“This
is
being
done
very
much
for
the
purpose
of
disbanding
clients
under
brokers
to
price
them
separately,”
said
a
person
familiar
with
the
prime
brokerage
industry
who
asked
to
remain
anonymous.

OKX
declined
to
comment.

Bybit,
another
large
crypto
exchange,
is
“closely
monitoring
the
recent
developments
regarding
the
removal
of
the
prime
brokerage
multi-tiered
fee
structure
by
other
platforms,”
said
Eugene
Cheung,
the
firm’s
head
of
institutions.

“However,
we
have
no
plans
to
make
any
changes
to
our
fee
structure.
Our
commitment
remains
steadfast
in
ensuring
compliance
and
the
best
interests
of
our
users,”
Cheung
said
in
an
email.