Guest Post

On Ramping or off Ramping Large Amounts of Crypto? Here Is How to Avoid Pitfalls in Today’s Market

Written by: Coinpedia

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Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

    May 27, 2021


    Converting large amounts of crypto to fiat and vice-versa may be a complicated task, especially for those who are not accustomed to dealing with exchanges, Bitcoin wallets, and decentralized apps on a daily basis. What’s more, you may have never known that these obstacles existed until you had to face them first-hand.

    We are going to describe popular methods of on-ramping and off-ramping large amounts of crypto, obstacles one may come across and existing solutions to overcome them.

    Centralized Exchange On Ramp/Off Ramp

    Binance, Huobi, Kraken, and other popular centralized exchanges may seem to be the most obvious solution for exchanging cryptocurrencies. 

    However, the target audience of these platforms mainly consists of small and mid-size investors and traders. The sums they operate with rarely exceed $100k. If you try to convert a larger amounts, you may face the following issues:

    • Not all exchanges support fiat. Typically, they may offer alternatives in the form of stable coins such as USDT or USDC. However, this option is good only if you don’t plan to cash out in the near future.
    • Strict KYC requirements. Those exchanges that deal with fiat are usually subject to tighter control from the local authorities, therefore they set up strict verification rules for their users. To set up an account, you will have to provide them with a big variety of personal documents while the onboarding procedure may take up to a few months.
    • Withdrawal limitations. Typically, exchanges set up their own withdrawal limits, especially for wire and SEPA transfers. For example, one of the most popular exchanges, Binance allows a maximum withdrawal of EUR 50k per day. Also, you may have to wait three to five days before you see the funds credited to your bank account.
    • Geo limitations. There is practically no exchange that accepts users from all over the world, there are always some geographical restrictions. Finding an exchange that would support fiat withdrawals and deposits in a given region may be a challenge.
    • A large transaction can swing the market. To avoid the previous issue, you may buy all the offers from the order book one by one, but that will result in a very inefficient exchange rate. Other participants of the market will see that someone executes all the orders that appear in the book and will increase their prices.

    On Ramp or Off Ramp Using The OTC?

    Platforms that allow exchanging cryptocurrencies “over-the-counter” or, shortly, OTC markets are an alternative solution for those who want to bypass all the obstacles of centralized exchanges

    OTCs serve institutional investors in a better way than centralized exchanges due to the lack of transactional limits. One can buy and sell big amounts of crypto via a user-friendly and simple interface, however, there is a flip side to this approach as well. The list of challenges include:

    • Worse rate and higher fees

    While on a traditional exchange you set up the price yourself and clearly see the fees, OTCs are not that transparent. Your order will be executed regardless of the sum you specify, but the rate will be much worse and the hidden fees will be much higher.

    • Long processing times

    Typically, OTCs operate through centralized exchanges just the same so they face the same issues that standalone users do. If you want to exchange a really big amount of money, OTC will search across all the platforms that it operates with in order to get the required sum. Therefore, the time of the operation will be increased.

    • Some OTCs have arcane KYC processes

    If the service is represented by a centralized exchange, in most cases, only verified users can make use of it. ShapeShift implemented obligatory KYC in 2018 under the pressure of local authorities. Other OTCs still roam wild and free, but it’s the question of time when governments will turn their attention towards them.

    • SWIFT transfers may be blocked

    If you withdraw fiat to certain bank accounts using SWIFT,  the transaction may be blocked. Authorities automatically flag large sums of money transferred by unverified users and have to take necessary precautions.

    • Geo limitations 

    Some OTCs don’t cover a large range of regions either. It is especially difficult for US residents to find a platform that would let them exchange funds as the regulations are more strictly defined in this country than anywhere else.

    Cryptocurrency Clubs For On Ramping or Off Ramping? 

    Yes! Lifestyle clubs such as Aurae Lifestyle can resolve not only all the pains associated with storing and liquidating large amounts of crypto, but also provide their members with various concierge services.   Steven Hatzakis, senior writer and Aurae Lifestyle member adds:  

    “The services provided by Aurae Lifestyle have really simplified many aspects of cryptocurrency payments for me. The prefunded debit card that they provide is the best card among the similar options represented in the market. The high limits that they offer to their VIP clients are incomparable with other options while the tailored services make managing big amounts of crypto proceeds much easier.”

    Club Swan is a lifestyle club designed for moderately affluent crypto enthusiasts with lifestyle needs ranging from travel, attending specialized events and ancillary buy and sell services for cryptocurrencies.  Similar to Aurae Lifestyle, Club Swan members can counterparty sell large sums of crypto depending upon their membership tier. Proceeds from liquidation go directly to the Club Swan prepaid debit card and transfers occur relatively quickly.  

    This solution mitigates timing and spend limit problems with liquidation while providing an environment of like-minded individuals.

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    Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

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