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Overview of Cryptocurrency OTC Licensing: How Do Compliance Requirements Differ Under Hong Kong, EU, and U.S. Laws?
The Final Cut: Will the Rate-Cycle End in Another Bitcoin Crash?
A 25-bp Gift from the Fed The FOMC just trimmed rates by 25 basis points—historic only in the sense that it may turbo-charge a bull run that is already on borrowed time. With the 2024 halving now 17 months behind us, history says a cyclical top is due around December 2025. Chair Powell’s cut—and the hint of two more before year-end—gives the ≈ US-$ 7.4 trn parked in money-market funds a powerful incentive to reach for yield. Spot-Bitcoin ETFs, BTC-treasury companies and zero-friction broker a...
Robinhood vs. Coinbase: A $160-Billion Duel
Baihua Blockchain • August 11, 2025 Author: Thejaswini MA | Translated & edited by Baihua --- A Quiet War in Your Pocket A silent battle is unfolding on your phone screen, and most people still haven’t noticed. America’s two flagship finance apps—Robinhood and Coinbase—are running diametrically opposed experiments on millions of users. Robinhood sits at No. 14 in the App Store’s Finance category; Coinbase is at No. 20. Both are worth roughly $80 billion. Both chase the same young investors, y...
$500 Million Bet on Anthropic: SBF Almost Made the Most Successful Investment in AI History
In 2021, Sam Bankman-Fried (SBF), founder of the cryptocurrency exchange FTX, invested $500 million in AI company Anthropic through his hedge fund Alameda Research, acquiring approximately 8% equity. At that time, the AI boom had not yet begun, and this investment was regarded as a highly forward-looking high-stakes bet. However, in 2022, SBF’s empire collapsed due to the FTX crisis, and his assets were liquidated. FTX eventually sold its Anthropic stake in two installments, reclaiming approx...
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The Role of OTC Traders in the Virtual Asset Market
OTC traders, as core participants in the virtual asset market, specialize in providing bulk trading platforms for high-net-worth clients, institutional investors, and exchanges. Through customized trading mechanisms, they ensure large-scale transactions are completed without disrupting market prices while offering clients greater privacy, security, and liquidity.
Market Trends and Regional Distribution
Data shows that in 2024, OTC trading volume surged by 106% year-over-year, reflecting heightened market activity and industry demand. Stablecoins dominated this growth, accounting for approximately 95% of total volume, with a 147% annual increase. Geographically, Europe led institutional OTC trading with a 38.5% share, followed by North America, Asia, and the Middle East, each at 15.4%.
Compliance Challenges for OTC Traders
The cryptocurrency industry operates under looser regulatory frameworks compared to traditional finance, creating compliance uncertainties for OTC traders across regions. While global regulations are tightening—particularly in anti-money laundering (AML) and know-your-customer (KYC) requirements—OTC traders must navigate evolving legal demands.
Their business model, which involves large, non-public transactions, heightens risks of market manipulation and information asymmetry. Without transparent pricing, OTC traders must implement additional safeguards to ensure fairness and price stability.
Cross-border transactions further complicate compliance, as differing regional standards necessitate adaptable strategies, especially in data protection and privacy laws.
The Critical Role of OTC Licensing
Securing licenses helps OTC traders meet legal requirements, enhance credibility, and boost competitiveness in an increasingly stringent regulatory environment.
Current State of OTC Licensing Globally
While regulations remain fragmented, key jurisdictions like Hong Kong, the EU, and the U.S. have begun implementing frameworks. Below, Mankun Lawyers analyze these regions’ approaches.
1. Hong Kong: Legislative Framework for OTC Regulation
In February 2024, Hong Kong’s Financial Services and Treasury Bureau (FSTB) proposed licensing OTC traders under the Anti-Money Laundering and Terrorist Financing Ordinance (AMLO). The framework, expected soon, mandates:
AML/KYC Compliance: Rigorous customer due diligence (CDD) and suspicious activity reporting.
Documentation: Submission of AML policies, risk management measures, and operational procedures.
Ongoing Oversight: Regular audits by Hong Kong Customs (CCE) to ensure transparency in large transactions.
As of April 2025, the proposal remains under consultation.
2. The EU: MiCA’s Unified Approach
The Markets in Crypto-Assets (MiCA) regulation classifies OTC traders as Crypto Asset Service Providers (CASPs). Key requirements include:
AML/KYC: Enhanced CDD for large transactions and mandatory suspicious activity reporting.
Risk Management: Frameworks to prevent market manipulation and ensure stability.
Cross-Border Compliance: Adherence to MiCA’s standards across the European Economic Area (EEA), including GDPR for data protection.
A single CASP license grants EEA-wide access.
3. The U.S.: Decentralized Regulation
No unified federal framework exists. OTC traders face oversight from:
SEC: If trading securities-like assets (per the Howey Test).
FinCEN: Registration as Money Services Businesses (MSBs) with AML/CFT obligations.
CFTC: For derivatives involving commodities like Bitcoin.
New York’s BitLicense imposes additional state-level requirements, including capital adequacy and periodic reporting.
Mankun Lawyers’ Compliance Recommendations
Given regional disparities, OTC traders should:
Establish Local Compliance Teams: To monitor evolving regulations, especially in the U.S.
Standardize Global AML/KYC Policies: Adaptable to jurisdictional specifics.
Enhance CDD and Background Checks: Ensure client transparency.
Implement Advanced Transaction Monitoring: Detect market manipulation.
Conduct Regular Cross-Border Training and Audits: Maintain compliance agility.
By adopting these strategies, OTC traders can mitigate risks and operate seamlessly across markets.
The Role of OTC Traders in the Virtual Asset Market
OTC traders, as core participants in the virtual asset market, specialize in providing bulk trading platforms for high-net-worth clients, institutional investors, and exchanges. Through customized trading mechanisms, they ensure large-scale transactions are completed without disrupting market prices while offering clients greater privacy, security, and liquidity.
Market Trends and Regional Distribution
Data shows that in 2024, OTC trading volume surged by 106% year-over-year, reflecting heightened market activity and industry demand. Stablecoins dominated this growth, accounting for approximately 95% of total volume, with a 147% annual increase. Geographically, Europe led institutional OTC trading with a 38.5% share, followed by North America, Asia, and the Middle East, each at 15.4%.
Compliance Challenges for OTC Traders
The cryptocurrency industry operates under looser regulatory frameworks compared to traditional finance, creating compliance uncertainties for OTC traders across regions. While global regulations are tightening—particularly in anti-money laundering (AML) and know-your-customer (KYC) requirements—OTC traders must navigate evolving legal demands.
Their business model, which involves large, non-public transactions, heightens risks of market manipulation and information asymmetry. Without transparent pricing, OTC traders must implement additional safeguards to ensure fairness and price stability.
Cross-border transactions further complicate compliance, as differing regional standards necessitate adaptable strategies, especially in data protection and privacy laws.
The Critical Role of OTC Licensing
Securing licenses helps OTC traders meet legal requirements, enhance credibility, and boost competitiveness in an increasingly stringent regulatory environment.
Current State of OTC Licensing Globally
While regulations remain fragmented, key jurisdictions like Hong Kong, the EU, and the U.S. have begun implementing frameworks. Below, Mankun Lawyers analyze these regions’ approaches.
1. Hong Kong: Legislative Framework for OTC Regulation
In February 2024, Hong Kong’s Financial Services and Treasury Bureau (FSTB) proposed licensing OTC traders under the Anti-Money Laundering and Terrorist Financing Ordinance (AMLO). The framework, expected soon, mandates:
AML/KYC Compliance: Rigorous customer due diligence (CDD) and suspicious activity reporting.
Documentation: Submission of AML policies, risk management measures, and operational procedures.
Ongoing Oversight: Regular audits by Hong Kong Customs (CCE) to ensure transparency in large transactions.
As of April 2025, the proposal remains under consultation.
2. The EU: MiCA’s Unified Approach
The Markets in Crypto-Assets (MiCA) regulation classifies OTC traders as Crypto Asset Service Providers (CASPs). Key requirements include:
AML/KYC: Enhanced CDD for large transactions and mandatory suspicious activity reporting.
Risk Management: Frameworks to prevent market manipulation and ensure stability.
Cross-Border Compliance: Adherence to MiCA’s standards across the European Economic Area (EEA), including GDPR for data protection.
A single CASP license grants EEA-wide access.
3. The U.S.: Decentralized Regulation
No unified federal framework exists. OTC traders face oversight from:
SEC: If trading securities-like assets (per the Howey Test).
FinCEN: Registration as Money Services Businesses (MSBs) with AML/CFT obligations.
CFTC: For derivatives involving commodities like Bitcoin.
New York’s BitLicense imposes additional state-level requirements, including capital adequacy and periodic reporting.
Mankun Lawyers’ Compliance Recommendations
Given regional disparities, OTC traders should:
Establish Local Compliance Teams: To monitor evolving regulations, especially in the U.S.
Standardize Global AML/KYC Policies: Adaptable to jurisdictional specifics.
Enhance CDD and Background Checks: Ensure client transparency.
Implement Advanced Transaction Monitoring: Detect market manipulation.
Conduct Regular Cross-Border Training and Audits: Maintain compliance agility.
By adopting these strategies, OTC traders can mitigate risks and operate seamlessly across markets.
Support TALK ABOUT WEB3
Overview of Cryptocurrency OTC Licensing: How Do Compliance Requirements Differ Under Hong Kong, EU, and U.S. Laws?
The Final Cut: Will the Rate-Cycle End in Another Bitcoin Crash?
A 25-bp Gift from the Fed The FOMC just trimmed rates by 25 basis points—historic only in the sense that it may turbo-charge a bull run that is already on borrowed time. With the 2024 halving now 17 months behind us, history says a cyclical top is due around December 2025. Chair Powell’s cut—and the hint of two more before year-end—gives the ≈ US-$ 7.4 trn parked in money-market funds a powerful incentive to reach for yield. Spot-Bitcoin ETFs, BTC-treasury companies and zero-friction broker a...
Robinhood vs. Coinbase: A $160-Billion Duel
Baihua Blockchain • August 11, 2025 Author: Thejaswini MA | Translated & edited by Baihua --- A Quiet War in Your Pocket A silent battle is unfolding on your phone screen, and most people still haven’t noticed. America’s two flagship finance apps—Robinhood and Coinbase—are running diametrically opposed experiments on millions of users. Robinhood sits at No. 14 in the App Store’s Finance category; Coinbase is at No. 20. Both are worth roughly $80 billion. Both chase the same young investors, y...
$500 Million Bet on Anthropic: SBF Almost Made the Most Successful Investment in AI History
In 2021, Sam Bankman-Fried (SBF), founder of the cryptocurrency exchange FTX, invested $500 million in AI company Anthropic through his hedge fund Alameda Research, acquiring approximately 8% equity. At that time, the AI boom had not yet begun, and this investment was regarded as a highly forward-looking high-stakes bet. However, in 2022, SBF’s empire collapsed due to the FTX crisis, and his assets were liquidated. FTX eventually sold its Anthropic stake in two installments, reclaiming approx...
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