Are there any risks involved in buying OTC cryptocurrencies?

3 answers

• Dec 18, 2021 · 3 years ago
  Buying cryptocurrencies over-the-counter (OTC) can be risky due to the lack of regulation and transparency. Unlike trading on traditional exchanges, OTC transactions are conducted directly between buyers and sellers, often facilitated by brokers or dealers. This means that there is a higher risk of fraud or scams, as there is no centralized authority overseeing the transactions. Additionally, OTC trades may involve larger amounts of money, making them attractive targets for hackers and cybercriminals. It is crucial for investors to thoroughly research and vet the counterparty before engaging in OTC trading to mitigate these risks.
  638319
• Dec 18, 2021 · 3 years ago
  Yes, there are risks involved in buying OTC cryptocurrencies. One of the main concerns is the potential for price manipulation. Since OTC trades are not conducted on public exchanges, the prices can be more easily manipulated by large traders or whales. This can lead to significant price fluctuations and potentially result in losses for individual investors. Another risk is the lack of liquidity in OTC markets, which can make it difficult to buy or sell large amounts of cryptocurrencies at fair prices. It is important for investors to carefully consider these risks before engaging in OTC trading.
  603201
• Dec 18, 2021 · 3 years ago
  According to BYDFi, a digital currency exchange, there are several risks associated with buying OTC cryptocurrencies. These risks include counterparty risk, where the other party may default on the transaction or engage in fraudulent activities. Another risk is the lack of regulatory oversight, which means that investors may have limited legal recourse in case of disputes. Additionally, OTC trading may involve higher transaction costs and less transparency compared to trading on traditional exchanges. Investors should carefully evaluate these risks and consider working with reputable brokers or dealers when engaging in OTC trading.
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