Caitlin Long, the founder and chief exec of Custodia Bank, a Wyoming-chartered state bank that focuses on digital assets, took to X last week to claim that there was “no #BTC available for sale on the big OTC desks.”
This was before she had said that “Only ~40 #BTC available for sale at any price at one point on Wednesday, I was told by a credible source.”
This questionable claim was echoed by a variety of other accounts across X, including Lark Davis, a crypto influencer accused of doing paid endorsements of tokens. Davis made the claim that “OTC desks are running out of Bitcoin” and cited a chart from Glassnode to support the assertion.
Glassnode notes in its description of this chart that “this data is based on three different OTC desks,” a less than comprehensive look at the over-the-counter (OTC) trading desk market.
These comments appear to misunderstand the role of OTC desks in the ecosystem. Specifically that they generally don’t keep large quantities of assets on hand, instead primarily working to match buyers and sellers across the ecosystem.
Evgeny Gaevoy, the CEO of Wintermute, a major cryptocurrency market maker and OTC desk, took to X to express frustration with this extraordinarily dubious claim.
Oh cmon… https://t.co/xXKDZZ8knf pic.twitter.com/dAD2lixPQ1
— wishful cynic (@EvgenyGaevoy) March 2, 2024
Read more: Kraken founder promoted Custodia’s doomed bank and stablecoin
This sentiment was echoed by other OTC traders, including Max Boonen, who previously founded B2C2, another cryptocurrency liquidity provider, and posted a thread to explain the problems with this claim.
Coinbase experienced a number of problems on Friday also, noting on X that “some customers may be experiencing failed sends, withdraws, or deposits across Coinbase.com and degraded performance across trading.” It appears to have resolved this problem on the same day.
Coinbase’s status page currently also notes it is experiencing issues including users seeing ‘zero balance’ and ‘latency across pages,’ though it claims “trading is not impacted.”
Custodia Bank has been engaged in a lawsuit against the Kansas City Federal Reserve that alleges an “unlawful delay in processing an application critical to Custodia’s business.” The application in question is Custodia Bank’s application for a Federal Reserve Master account.
