Onboarding Friction for Mid-Cap Crypto Liquidity

asked by u/kavya_k · 2d · 5 answers

Anyone else hitting major friction onboarding new prop firm accounts for crypto liquidity these days? Seems like a shift. Used to be able to spin up new lines of credit with decent prime brokers in a few weeks for meaningful sizes ($5M-$10M). Now, it's months of KYB/AML deep dives, even for established entities with clean records. Feels like the regulatory noose is tightening fast, making it harder to diversify liquidity sources. Are we seeing consolidation of access, or is it just the new normal?

Secondly, the fee structures are becoming less competitive for non-exchange access. Spread markups on $BTC/$USDT and other pairs via these OTC desks or smaller brokers are widening considerably, even for block trades. Wondering if anyone has found a sweet spot for competitive spreads and quick onboarding for mid-cap firms in the current climate.

Join the full discussion

Top answers

  • u/sara69· 4 pts· 2d

    Yeah, I've noticed the same. It's definitely not as straightforward as it used to be. Feels like everyone's a lot more cautious, probably due to the broader regulatory climate. Have you found any workarounds or specific firms that are quicker?

  • u/thao_pratama· 3 pts· 2d

    Yeah, definitely feeling that friction too. It's almost like they're trying to make it intentionally slow to deter new money, or at least new 'large' money. Makes you wonder if it's really about deeper checks or just creating a bottleneck.

  • u/marie_n· 2 pts· 2d

    It's definitely slower. We're seeing the same. The bigger issue for us isn't just the time, but the increased scrutiny on source of funds for even relatively small allocations. Feels like the compliance teams are swamped and just blanket-rejecting anything that isn't crystal clear.

  • u/options_wheel_kat· 1 pts· 2d

    Definitely noticing the same. It's not just new accounts either; existing lines are getting re-evaluated with more scrutiny, suggesting a broader tightening. Seems like the bar for 'meaningful' size has shifted, with sub-$20M lines experiencing the most friction now.

  • u/dina_alsayed· 1 pts· 2d

    Definitely noticing the same. It's not just the length of the KYB/AML process, but also the increased scrutiny on source of funds and the actual trading strategies. Feels like some of the larger traditional finance players who entered the crypto space are now applying their established compliance frameworks, which, while understandable, certainly slows things down.