> For the complete documentation index, see [llms.txt](https://faq.finchtrade.com/guide/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://faq.finchtrade.com/guide/core-concepts/terminology.md).

# Terminology

A practical reference for the terms B2B platforms encounter when integrating crypto. Definitions are written for builders and operators, not for retail users — so we focus on what the term means in the context of running a platform, not the consumer-facing version.

## Core trading and liquidity

**Liquidity provider.** A counterparty that supplies bid and ask prices on demand and is willing to execute against them. Distinct from an exchange in that there is no central order book — the LP quotes directly, and settlement happens bilaterally.

**OTC (over-the-counter).** Trading conducted directly between two parties, without going through a centralised exchange. OTC desks like FinchTrade serve clients that need larger sizes, tighter spreads, or asset pairs that are hard to access on retail venues.

**RFQ (Request for Quote).** A trading model where the client requests a price for a specific volume, the LP returns a firm or last-look price, and the client decides whether to execute. RFQ avoids the slippage of market orders and is standard for institutional-size trades.

**Last look.** The right of an LP to reject an order in the brief window between quote and execution, typically used to manage risk on volatile pairs.

**Spread.** The difference between bid and ask prices. The LP's margin on a trade is derived from the spread, not from explicit fees.

**Slippage.** The difference between the expected price of a trade and the executed price, usually caused by insufficient liquidity at the quoted level. RFQ-based execution eliminates slippage by quoting a fixed price for a specific volume.

**Smart order routing.** Logic that splits a single order across multiple liquidity sources to get the best aggregated price. FinchTrade aggregates across connected exchanges and OTC desks for each quote.

## Account and balance structures

**Omnibus account.** A single account held by an operator on behalf of multiple underlying clients, with internal records mapping balances to each client. The operator interacts with the bank or exchange as one entity; segregation happens off-platform. Common in PSPs, payroll, and OTC desks.

**Segregated account.** An account where each client's balance is held in a distinct, separately identifiable wallet or account at the bank or exchange. Stronger from a client-protection standpoint, but operationally heavier and often slower.

**Sub-account.** A logical division of an omnibus account into client-specific buckets, usually with separate API keys, reporting views, and permissions. The funds sit in the same legal account; the segregation is at the platform layer.

**Pooled balance.** Funds belonging to multiple clients held together in a single account, typical in omnibus structures.

**Whitelisted address.** A blockchain address pre-approved for sending or receiving funds, typically as part of an LP's onboarding process. Whitelisting reduces fraud and AML risk but takes time — at FinchTrade, up to 48 hours per address.

## Custody

**Custodial.** The provider holds client funds. The provider bears custody risk, settlement risk, and operational responsibility. Faster operationally but legally heavier.

**Non-custodial.** The client holds their own funds and only sends them when settling a trade. The provider never has custody. Lower custody risk for the client, more operational steps per trade.

**MPC (Multi-Party Computation) custody.** A cryptographic technique that splits private keys across multiple parties so no single party can move funds alone. Used by FinchTrade's custody partners (Fireblocks and Inabit) as the underlying technology.

**Cold wallet / hot wallet.** Cold wallets are offline and used for long-term storage; hot wallets are online and used for active trading and settlement. Most institutional setups use a combination, with the majority in cold storage and only operational balances in hot wallets.

**DVP (Delivery vs Payment) settlement.** A settlement model where the asset and the payment change hands simultaneously, eliminating the risk of one side delivering and the other not. Available at FinchTrade through custodian partners.

## Settlement

**Net open position (NOP).** The unsettled balance between two trading parties after one or more trades. OTC settlement happens against the NOP — the parties don't settle every trade individually, just the net.

**T+0 settlement.** Same-day settlement. FinchTrade's default.

**Pre-funding.** The requirement to deposit the full value of a trade before executing it. Centralised exchanges require 100% pre-funding; FinchTrade does not, requiring 0–30% partial collateral instead.

**Standard settlement instructions (SSIs).** The pre-agreed bank account and wallet details exchanged between counterparties before trading begins. Establishing SSIs upfront avoids delays at settlement time.

**SEPA / SEPA Instant.** EU euro payment systems. SEPA is standard (typically same-day or next-day), SEPA Instant is real-time.

**SWIFT.** International wire system, used for cross-currency and non-EU payments. Slower than SEPA but globally interoperable.

**BLINC.** A real-time fiat settlement network used by crypto-native banks for instant transfers between member institutions, including for EUR and USD.

## Stablecoins and tokens

**Stablecoin.** A cryptocurrency designed to hold a stable value relative to a fiat currency, typically through reserves (USDT, USDC, EURC) or algorithmic mechanisms. Used heavily in B2B crypto for settlement because they avoid volatility while still moving on blockchain rails.

**ERC-20 / TRC-20 / BSC / Polygon / Solana.** Different blockchain networks on which the same token (like USDT) can be issued. The token holds the same value, but the network determines speed, cost, and which wallets and exchanges can receive it. Network mismatches are a common settlement error.

**Auto-conversion.** A flow where a payment received in one asset is automatically converted to another at the moment of receipt — for example, accepting USDT and converting to EUR for settlement to a bank account. Reduces volatility exposure and operational steps per trade.

## Compliance and regulatory

**KYC (Know Your Customer).** Identity verification of individual clients. Required by AML regulation in most jurisdictions for any regulated financial activity.

**KYB (Know Your Business).** The corporate equivalent of KYC. Verification of corporate clients including ownership structure, ultimate beneficial owners, business activity, and source of funds.

**AML / CFT.** Anti-Money Laundering / Counter-Financing of Terrorism. The regulatory framework that drives KYC, KYB, transaction monitoring, and suspicious activity reporting.

**Travel Rule.** A regulatory requirement that crypto transfers above a certain threshold include identifying information about both sender and recipient, originally a banking concept extended to crypto by FATF. FinchTrade complies via specialised travel-rule tooling.

**VASP (Virtual Asset Service Provider).** Regulatory term for businesses providing crypto services. Definitions vary by jurisdiction. FinchTrade is a VASP under the Swiss VQF framework.

**MiCA (Markets in Crypto-Assets).** The EU's crypto regulation, in force since 2024. Establishes the CASP licence and a harmonised regime across EU member states. FinchTrade is not MiCA-licensed and does not serve EU retail.

**CASP (Crypto-Asset Service Provider).** The MiCA equivalent of a VASP — a licensed operator authorised to provide crypto services in the EU.

**VQF.** A Swiss self-regulatory organisation recognised by FINMA, supervising financial intermediaries including FinchTrade. VQF membership covers AML and KYC obligations under Swiss law.

**FINMA.** The Swiss Financial Market Supervisory Authority. Recognises self-regulatory organisations like VQF and directly supervises larger Swiss financial institutions.

**License-as-a-Service.** A commercial model where a regulated entity allows partners to operate certain activities under its licence, typically for a fee or revenue share. The structure depends on the specific regulator and the activities involved.

## Operational and product

**API-first.** A platform designed primarily to be accessed programmatically rather than through a UI. Common in B2B infrastructure where the consumer is another piece of software.

**Sandbox / UAT.** Test environments that mirror production behaviour without using real funds. Critical for integration testing.

**Webhook.** A push notification from one system to another when an event happens — a trade settles, a deposit arrives, a withdrawal is requested. Avoids the inefficiency of polling.

**Reporting layer.** The interface — UI, API, scheduled exports — through which a partner sees what happened on their platform: balances, trades, settlements, fees. Often the difference between a usable platform and an unusable one.