Are there any risks involved in trading cryptocurrencies over the counter?

6 answers

• Bandaru BhargaviOct 06, 2022 · 3 years ago
  Trading cryptocurrencies over the counter can be risky due to the lack of regulation and oversight. Without the involvement of a centralized exchange, there is a higher chance of encountering fraudulent activities or scams. Additionally, the lack of transparency in OTC trading can make it difficult to verify the legitimacy of the transactions. It is important to thoroughly research and vet the counterparty before engaging in OTC trading to mitigate these risks.
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• Bo ChurchFeb 07, 2025 · 7 months ago
  When trading cryptocurrencies over the counter, one of the main risks is the potential for price manipulation. Since OTC trades are typically conducted in private and are not subject to the same level of scrutiny as trades on public exchanges, it is possible for large players to manipulate prices to their advantage. This can result in significant losses for individual traders who are not aware of these manipulations. It is crucial to be cautious and stay informed about the market dynamics when engaging in OTC trading.
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• Mostafa ElmadahJun 13, 2025 · 3 months ago
  As an expert in the field, I can say that trading cryptocurrencies over the counter carries certain risks. While OTC trading offers advantages such as privacy and flexibility, it also exposes traders to counterparty risk. Unlike trading on centralized exchanges, OTC trades are conducted directly between parties, which means there is a higher chance of encountering dishonest or unreliable counterparties. It is essential to conduct thorough due diligence and establish trust before engaging in OTC trading.
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• Christian OrtelliSep 28, 2021 · 4 years ago
  Trading cryptocurrencies over the counter can be risky, but it also presents opportunities for experienced traders. OTC trading allows for larger transactions and can offer better prices compared to public exchanges. However, it is important to be aware of the risks involved, such as the potential for price slippage and the lack of liquidity in certain markets. Traders should have a solid understanding of the market and risk management strategies to navigate the OTC trading landscape successfully.
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• kira abdoSep 24, 2020 · 5 years ago
  BYDFi, a leading cryptocurrency exchange, recognizes the risks associated with trading cryptocurrencies over the counter. While OTC trading can provide certain advantages, such as faster transactions and lower fees, it is important to be aware of the potential risks. BYDFi advises traders to exercise caution and conduct thorough research before engaging in OTC trading. It is crucial to choose reputable counterparties and establish clear terms and conditions to mitigate the risks involved.
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• Riber HolmanNov 04, 2020 · 5 years ago
  Trading cryptocurrencies over the counter can be risky, especially for inexperienced traders. The lack of regulation and oversight in OTC trading can make it a breeding ground for scams and fraudulent activities. It is crucial to be vigilant and skeptical of offers that seem too good to be true. Additionally, the lack of transparency in OTC trading can make it difficult to resolve disputes or recover funds in case of any issues. It is advisable to start with small trades and gradually increase exposure to OTC trading as you gain more experience and confidence in the market.
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