Fake OTC Desks: How the Large Trade Is Set Up

Fraudulent desks target people with meaningful amounts, so the production quality is higher than in consumer frauds. The structure is still recognisable. A provider operating under supervision, such as a regulated crypto liquidity provider, cannot behave the way described below.

The approach

Contact comes through a channel that suggests selection rather than broadcast: an introduction from a mutual contact, a message referencing your actual situation, an approach at or after an industry event.

The pitch is access. Better pricing than exchanges, settlement without market impact, a relationship rather than a platform.

The credentials

A website with a corporate presence. A registered company, sometimes genuinely registered, in a jurisdiction with light requirements. Staff profiles with plausible histories. Occasionally a real office address.

A claimed licence, which is where verification either happens or does not. The number may be real and belong to a different entity, or the jurisdiction may have no meaningful supervision, or the licence may cover something other than trading.

The paperwork

This is what distinguishes it from consumer fraud. There is a trading agreement, a compliance questionnaire, identity verification requests, and a quote document with a reference number.

The process feels rigorous, and the rigour is the persuasion. Someone who has completed onboarding, supplied documents and signed an agreement has invested enough to feel committed. The business-side equivalent runs through a provider serving funds and family offices, with the screening already in place.

The point where money moves

The first trade is small and settles perfectly. Sometimes several do.

Then a larger trade is proposed, with a better price justified by size. The settlement structure changes slightly: this time you send first, because of a compliance requirement, a banking issue, or a policy for larger amounts.

That change is the fraud.

The verification that prevents it

The licence, on the regulator’s own register. Entity name matching the contract exactly. Permissions covering the activity. No conditions.

The bank account. Settlement should be to an account in the same registered company name, at a bank you can identify. An account in a different name, or in a jurisdiction unrelated to the company, is conclusive.

The people. Verify independently, not through the profiles supplied. A professional history that cannot be confirmed anywhere else is a fabrication.

The settlement structure, held constant. Whatever arrangement protected you on the first trade must apply to the largest one. A change to the structure for a larger amount is the entire mechanism.

The rule

Settlement terms do not change with size. If the arrangement was an intermediary holding both legs, it stays that way. A counterparty who accepted it at fifty thousand and refuses it at five hundred thousand has explained themselves.

The introduction problem

Many of these arrive through a genuine acquaintance who was themselves defrauded, or who was paid a referral fee.

An introduction is not verification. Run the same checks regardless of who made it, and expect the person who introduced you to be relaxed about that if the desk is real. Check the coverage list before relying on any of this. Collect & Exchange publishes it.