- Prime brokerages have to supply the information by July 17.
- The move is believed to curtail a multi-tiered fee system loophole used by prime brokerages.
Crypto exchange OKX wants prime brokerages to provide more information about their clients. Reports indicate that the exchange asked for details about the subaccounts, the entities or individuals under them, and their jurisdiction.
The information needs to be provided by July 17. A letter accompanying the request reads in part:
“A failure to do so may result in undisclosed subaccounts being restricted from trading and/or subaccount closure.”
See Related: Binance, OKX, And Bybit Suspend USDT And USDC Deposits on Solana
Closing Loophole Used By Prime Brokers To Enjoy Lower Fees
The OKX move is believed to be informed by similar interventions made at rival crypto exchange Binance. Earlier this month, Binance altered its Link Plus Interface, eliminating a loophole that key trading firms used to offer rebates to clients.
Often, exchanges give their large customers discounted trading fees, allowing them to trade like VIPs on their platforms. This gives a loophole for prime brokerages to funnel multiple customers via a single account to qualify for lower fees.
Consequently, exchanges are cracking down on the loopholes that allow brokerages to bundle customers to enjoy lower trading fees. Previously, Binance said its move was to ensure compliance and level the playing ground for its users. Bybit is the other exchange that is said to be monitoring the developments that are curtailing the brokerage multi-tiered fee structure.
