Institutional crypto firm Liquidity Offset Network (lon.exchange) has launched a central counterparty service for over-the-counter (OTC) players.
The service, dubbed “OTSafe,” helps OTC traders reduce credit risk and manage collateral requirements, according to a statement shared with The Block on Monday. Traders QCP Capital and LedgerPrime have begun using OTSafe.
“One crucial infrastructure piece that is required for the Crypto OTC market to reach institutional scale is professional clearing and risk/collateral management. OTsafe serves that function perfectly,” said Darius Sit, managing partner at QCP.
Shiliang Tang, LedgerPrime’s chief investment officer, said OTSafe will help “greatly alleviate the operational burden and credit risk for all firms in the ecosystem, helping to usher in more institutional trading.”
OTSafe also provides crypto derivatives management tools, including matching, valuation, risk and margin calculation. “Crypto-currency options trading is one of the most exciting growth areas in this industry, but still well below its potential. With the launch of OTSafe we hope to give the market one of the tools it needs to achieve that potential,” said Simon Nursey, CEO of OTSafe.
Liquidity Offset Network has also hired Bob de Groot, a former crypto trader at DRW's OTC shop Cumberland, to run its U.S. and Europe operations.