Cryptocurrency exchanges are intensifying efforts to crack down on brokerages that bundle clients’ orders to benefit from lower, VIP trading fees. OKX, the second-largest exchange by volume, recently requested prime brokers to provide details of subaccounts, including the names and jurisdictions of the entities or individuals controlling each subaccount. The deadline for submission is July 17.
In a letter reviewed by CoinDesk, OKX warned that failure to comply could result in trading restrictions or closure of undisclosed subaccounts. Earlier, Binance, the largest exchange, altered its Link Plus interface to close a loophole allowing prime brokers to use a multitiered fee system for client rebates. Binance stated that the change aimed to “uphold compliance and ensure a level-playing field for all users,” a move first reported by Bloomberg.
Exchanges offer significant customers discounted trading fees to encourage loyalty. Prime brokerages, which provide trading services for professional and large investors, could potentially bundle multiple clients’ trades through a single account to qualify for these lower fees.
“This is being done to separate clients under brokers for individual pricing,” said an anonymous source familiar with the prime brokerage industry.
OKX declined to comment on the matter. Meanwhile, Bybit, another major crypto exchange, is observing the situation but has no immediate plans to alter its fee structure. Eugene Cheung, Bybit’s head of institutions, affirmed, “Our commitment remains steadfast in ensuring compliance and the best interests of our users,” in an email statement.
These developments mark a significant shift in how cryptocurrency exchanges manage their fee structures and ensure compliance, impacting prime brokerages and their clients.
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