What are the risks involved in trading crypto on OTC markets?

3 answers

• Shakeel NordienApr 08, 2025 · 4 months ago
  Trading cryptocurrencies on OTC markets can be risky due to the lack of regulation and transparency. Unlike traditional exchanges, OTC markets operate without a centralized platform, making it easier for scammers and fraudsters to take advantage of unsuspecting traders. Additionally, the lack of price transparency in OTC markets can lead to higher spreads and increased price manipulation. Traders should exercise caution and conduct thorough due diligence before engaging in OTC trading.
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• Azril TaufaniJun 22, 2022 · 3 years ago
  One of the risks associated with trading crypto on OTC markets is the potential for counterparty risk. OTC trades are often conducted directly between two parties, which means that if one party fails to fulfill their obligations, the other party may suffer financial losses. It's important for traders to carefully vet their counterparties and establish clear terms and conditions before entering into any OTC trades. Additionally, the lack of a centralized clearinghouse in OTC markets can make it more difficult to resolve disputes or recover funds in the event of a dispute.
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• Supriya DebnathSep 23, 2024 · 10 months ago
  As an expert in the cryptocurrency industry, I would advise traders to be cautious when trading crypto on OTC markets. While OTC trading can offer certain advantages such as increased privacy and flexibility, it also comes with its fair share of risks. Traders should be aware of the potential for price manipulation, lack of regulation, and counterparty risk. It's important to thoroughly research and understand the risks involved before engaging in OTC trading. Always remember to use reputable OTC platforms and conduct transactions with trusted counterparties to minimize the risks associated with trading on OTC markets.
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