Chinese Payment Giants Alipay and WeChat Pay Tell Huobi to Remove Names off the OTC Desk

The crackdown on Chinese crypto OTC desks continues as Alipay and WeChat Pay have requested Huobi to remove their services from the exchange's over-the-counter (OTC) trading desk.

The phrase “over-the-counter” can be used to refer to stocks that trade via a dealer network as opposed to on a centralized exchange. The idea behind OTC trading is that these brokers can provide a quoted price for large transactions and shield high-value traders from adversely impacting their own price point, as the traders would if they traded directly on an exchange.

Like much of the young crypto industry, the realm of OTC trading brokers can be opaque and difficult to navigate. This might be the reason for the massive crackdown against Bitcoin trading desks by financial payment services.

Both Alipay and WeChat Pay maintain their stane that they had not given permission to Huobi to use their financial services. Although as of January 28th, Huobi’s OTC trading platform permits their customers to upload QR codes from both systems in order to facilitate trading.

Recently, BitcoinExchangeGuide reported that leading financial service corporation in China, UnionPay has prohibited at least 25 virtual currencies OTCs. In the letter, platforms like Wechat and Alipay have been asked to refrain from using the UnionPay trademark for unlawful transactions.

These two firms had previously received similar warnings from UnionPay and this recent letter could be the final notice. The companies have also been asked to do a self-inspection, identify, and avoid any transactions that may be considered illegal. Alipay and Wechat are reported to have deactivated at least 3,000 accounts that have been making cryptocurrency OTC Bitcoin trading.

This adds to the vast range of problems Huobi is facing recently. Huobi had earlier confirmed to laying off a lot of their staffs. Twitter user Dovey Wan explained over the course of multiple tweets what Huobi has been doing, noting the expansion that they set up in 2017, which ultimately proved to be too much.

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