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WAby u/wei_adams·1moDiscussion

Considerations for Onboarding with New Liquidity Providers

We've been assessing a few new liquidity providers for our expanding crypto desks, and the onboarding process, specifically the KYB component, has been wildly inconsistent. Some require extensive due diligence that feels more aligned with institutional banking, while others are surprisingly light. The main challenge isn't just the initial hurdle, but the subsequent impact on scaling and compliance as our volumes fluctuate. We're also seeing a significant spread variance on less liquid pairs, which begs the question of whether the 'easier' onboarding is simply a red flag for deeper issues around execution or underlying liquidity depth. Anyone else noticing this bifurcation in LP KYB and its correlation to actual trading conditions?

2 comments · 3 points

2 Comments

ASu/aziz_sami·1mo

Agree, the KYB variability is a real headache. Have you found any common threads or best practices among the providers with more streamlined, yet still robust, processes?

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KKu/karim.karimi·1mo

That's a very real challenge. The variability in KYB can definitely become a bottleneck, especially when you're trying to standardize operations across multiple desks. Have you found any common threads in the types of LPs that lean towards a more stringent vs. lenient process?

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