Crypto

Extra Vigilance Needed for Hong Kong OTC Bitcoin Trading

JP Buntinx | April 12, 2018 | 10:00 am
scammer
Crypto

Extra Vigilance Needed for Hong Kong OTC Bitcoin Trading

JP Buntinx | April 12, 2018 | 10:00 am

In the world of cryptocurrency, there are numerous issues to contend with. Scams are perhaps the biggest problem as of right now. In Hong Kong, cryptocurrency enthusiasts are trying to counter this threat in different ways. OTC Traders face a lot of risks when dealing with random strangers looking to buy and sell Bitcoin. It is important to remain on top of these risks at all times.

The OTC Trading in Hong Kong

No one will be surprised to learn OTC Bitcoin trading is quite popular. This is especially true in Hong Kong, as the market is booming right now. Additionally, regulatory scrutiny and taxes in other countries pushes more people to OTC trading as well. Rest assured this form of buying and selling Bitcoin will become a lot more popular in the future as well.

At the same time, this form of trading poses significant risks. For traders in Hong Kong, there are numerous pitfalls to contend with. Over the past few months, OTC traders have effectively become the target of scammers. In a lot of cases, criminals used this trading option to convert income from scams and theft into Bitcoin. The overall appeal of cryptocurrency also attracts people with less than honest intentions, unfortunately.

In most cases, OTC traders are not even aware of them being used as a “mule”. Unfortunately, they will often pay the ultimate price in this regard. Unlike the criminals, OTC traders with honest intentions often use their real name and address. This makes it easier for law enforcement officials to track them down. The criminals, on the other hand, often seem to get away due to the lack of tangible leads. Addressing these risks has become a priority in Hong Kong, for obvious reasons.

Taking Matters Into One’s Own Hands

OTC Traders around the world can take a few measures to properly protect themselves from scammers. Verifying the origin of the funds being traded is a big step in the right direction. Doing so is not difficult, given Bitcoin’s lack of privacy and anonymity. Taking this extra step can make the difference between a legitimate trade and becoming an accomplice in money laundering.

Secondly, using an escrow procedure seems to be another good alternative. Bitcoin has native multisignature support. Additionally, there are third-party service providers who can help out in this regard. Last but not least, it’s also worth one’s while checking out when the trader’s account was registered. Not dealing with new users is a solid strategy as well, albeit it is a bit discriminatory.

The main reason for this latter approach is because amateur scammer accounts are not around that long. This is especially true in the OTC market. Most of these accounts are disposable and will have no trading history whatsoever. Avoiding those deals –  no matter how lucrative – is a golden rule to keep in mind at all times. Issues caused by scammers are not just native to Hong Kong either. It can happen anywhere in the world, at any given time.

 

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