Perfectly legal: Bitcoin over the counter, below the radar

Bitcoin Over-the-Counter (or, more generally, crypto OTC) is not what the international crypto exchanges tell you it is. It stands for buying and selling Bitcoin (or other cryptocurrencies) peer-to-peer in a private environment. And you may have been told something else, because the explicit purpose of such a transaction is to avoid the use of crypto exchanges, including so-called "OTC desks" and their excessive regulatory hurdles and requirements. This option is very attractive (only) if the circumstances are right.

Buying and selling cryptoassets over-the-counter, without the protection of regulated institutions, poses unique risks, challenges and pitfalls. In a malfunctioning transaction, the Bitcoin seller can lose his coins without getting paid. The buyer could pay without receiving digital title to the cryptocurrency. In addition, the payment could be challenged, reversed, and charged back later, while the blockchain transfer remains immutable. In the worst-case scenario, an ill-advised Bitcoin investor could find himself unwittingly involved in criminal behavior.

As a result, it is imperative to thoroughly understand the transactional design, structuring options, and risk mitigation opportunities when participating in a private-to-private Bitcoin trade. Only proper oversight will keep P2P BTC OTC safe and protected from both loss and illegality. 

PUGNATORIUS S.A. is a private research practice and niche think tank incorporated under the laws of Panama. Founded in 2009 by Dr. Ulrich Eder, it develops unconventional solutions and unorthodox perspectives on Modern Digital Asset Protection Strategies. Its viewpoints and statements are being read and recognized by Bitcoin millionaires and people whose stealth wealth and quiet luxury lifestyle are kept outside of traditional banking channels.