Escrow has long been used in the real estate and stock markets. And now it is becoming an increasingly important security mechanism in the crypto world. As bitcoin continues to make its transition from a niche product for an internet sub-culture to a household commodity used by millions of people across the globe as a store of value, speculative asset, and means of transaction, there is a demand for simple and secure bitcoin infrastructural solutions.
For example, what happens when you want to buy some bitcoin from a seller? How can a buyer wish to execute such a transaction be completely confident that the seller will fulfill the obligations of the transaction and vice versa?
While institutional investors continue to flock into the digital asset space via over the counter markets, as evident by the growing volumes, a lack of robust infrastructure also makes it an uncomfortable – and often risky – experience as a whole.
That is where services like Velo Trust play an important role. As a reminder, escrow is the facility that legally enables the third party to temporarily hold an asset or funds on behalf of two other parties that are in the process of executing a transaction.
When completing an escrow transaction via Velo Trust, the seller has a pre-specified amount of time to fund the escrow wallet. Once the bitcoin is received in escrow, Escrowed fiat funds are released to the seller. Only when the seller receives the funds is the escrowed bitcoin sent over to the buyer.
How it Works
Standard Escrow strictly adheres to Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines set forth internationally. KYC/AML protocols are enforced to ensure the platform is not used by criminal elements for money laundering activities. This provides peace of mind for both buyers and sellers knowing they are protected.
By guaranteeing that the buyer has the necessary funds and that the seller can deliver the product as promised, escrow adds a layer of trust to OTC transactions and also helps to prevent potential scams.
Escrow has long been used in the real estate and stock markets. And now it is becoming an increasingly important security mechanism in the crypto world.
The platform from all indications is
- Secure: All escrow transactions are encrypted using AES standards.
- Affordable: A fixed fee of 1% is applied to all transactions.
- Timely: Escrow transactions can be completed within a few hours, with statuses updated instantly.
- Effortless: Transactions are completed in a few simple steps.
Overall, the ecosystem around the Bitcoin OTC space is gearing up for explosive growth with investment and infrastructural solutions going hand-in-hand.
Disclaimer: The information presented here does not constitute investment advice or an offer to invest. The statements, views, and opinions expressed in this article are solely those of the author/company and do not represent those of Bitcoinist. We strongly advise our readers to DYOR before investing in any cryptocurrency, blockchain project, or ICO, particularly those that guarantee profits. Furthermore, Bitcoinist does not guarantee or imply that the cryptocurrencies or projects published are legal in any specific reader’s location. It is the reader’s responsibility to know the laws regarding cryptocurrencies and ICOs in his or her country.
