An OTC trade can be transacted in many ways, depending on client's individual requirements and needs.
Here are some examples of commonly used OTC processes:
Escrow verifies the Proof of Funds and Proof of Coin from the 2 parties.
Contracts with the terms of the trade are drawn up and agreed.
Buyer sends the funds to the Escrow.
Seller sends the Bitcoin to the buyer.
Once confirmed, Escrow releases the funds to the seller.
Bank transfer MT103 – 202 / 72
Seller requires an initial Letter of Intent from the Buyer.
Proof of Funds / Proof of Coin are exchanged.
KYC/AML Due diligence carried out by both parties.
Irrevocable Master Fee Protection Agreement agreed and signed.
Purchase Agreement agreed and signed.
Buyer sends funds to Seller *with a 202/72 clause as per contract.
Seller receives funds and releases Bitcoin to Buyer.
In both examples listed above, transactions are usually commenced by an initial test transaction followed by tranches of between 1,000 - 10,000 Bitcoins per day, as per the Purchase Agreement until the initial contract amount is exhausted.
We always recommend that our clients use a method that they are happy with and that they engage a good law firm to oversee the transaction and ensure that all relevant documents are reviewed and approved accordingly.
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