What are the risks involved in crypto OTC trade?

3 answers

• Nov 24, 2021 · 3 years ago
  When it comes to crypto OTC trade, there are several risks that individuals should consider. One of the main risks is the lack of regulation in the OTC market, which can lead to potential scams and fraud. Additionally, OTC trades often involve large amounts of money, making individuals more susceptible to theft and hacking attempts. It's also important to note that OTC trades are typically conducted directly between two parties, which means there is a higher level of counterparty risk compared to trading on exchanges. Overall, individuals should exercise caution and conduct thorough due diligence before engaging in crypto OTC trade.
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• Nov 24, 2021 · 3 years ago
  Crypto OTC trade can be risky due to the lack of transparency in the market. Unlike trading on exchanges, OTC trades are not publicly recorded, which means there is a higher risk of price manipulation and insider trading. Another risk is the potential for price slippage, where the price of the cryptocurrency can significantly change during the execution of the trade. This can result in individuals receiving less favorable prices than expected. Additionally, OTC trades often involve dealing with unknown and unverified counterparties, which increases the risk of fraudulent activities. It's crucial for individuals to carefully assess the risks and consider working with reputable OTC brokers or platforms to mitigate these risks.
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• Nov 24, 2021 · 3 years ago
  As an expert in the crypto industry, I can tell you that OTC trading carries certain risks that individuals should be aware of. One of the risks is the possibility of price manipulation, as OTC trades are not subject to the same level of scrutiny as trades on regulated exchanges. Another risk is the potential for illiquidity, especially when dealing with less popular or newly launched cryptocurrencies. This means that it may be difficult to find a buyer or seller at a desired price, which can lead to delays or unfavorable trade execution. It's important for individuals to carefully assess their risk tolerance and consider working with reputable OTC brokers who can provide liquidity and minimize these risks.
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