Dark Pools are not something illegal or something that was created just for the crypto market. This term appeared long ago and used for trading of huge amounts of assets between particular investors, excluding open market. So the Dark Pool is a simply Marketplace, where final bids are closed for anyone except the contractors.
The problem is that you should somehow find the commonly acceptable trading rate to perform a transaction. This rate is not strictly linked to an active exchange, but the price maker should pay attention to what is happening on the rest of the market outside the Dark Pool. That is why most of the crypto Dark Pools use the average rates from some exchange to perform the transaction.
Dark Pools were created to minimize the influence of the major traders and financial institutions on the market. They offer higher liquidity, more privacy, and lower fees.
Why people use Dark Pools to buy and sell crypto?
Dark Pools are suspected to be used for institutions and huge investors to make deals with big amounts of money. One of the biggest company working in the blockchain sphere – Coinbase advise their users to make deals using Dark Pools OTC markets for the volumes more than $5 million.
Completing that kind of deals on the open market can lead to unexpected consequences and conclude in the price drops. However, using the OTC technology, one can exchange the sums of money this huge without affecting the major trends and creating addition volatile for the market.