Over the counter (OTC) trades of bitcoin and other digital assets carry a simple risk: whoever goes first can be cheated. Some parties reduce that risk by having a lawyer hold the U.S. dollar side of the trade in a client trust account while the coins move. This article explains how that can work, and its limits.

What the firm holds, and what it does not

The firm receives and pays U.S. dollars by bank wire only. It does not buy, sell, hold, store, exchange or transfer cryptocurrency for anyone, and it never takes custody of private keys or wallets. That keeps the role to holding money in trust under a signed agreement, which is what lawyers do. See our crypto related deals page for the full limits.

A typical structure

  1. Agreement. Buyer and seller agree the asset, quantity, price, the buyer's receiving wallet address, and a deadline.
  2. Verification. Both parties pass identity and company verification and sanctions screening, and the buyer gives a source of funds declaration. Wallet addresses can also be screened.
  3. Deposit. The buyer wires dollars from its own account to the trust account.
  4. Delivery. The seller sends the coins on chain to the agreed wallet.
  5. Confirmation. The release condition is met when the buyer confirms receipt in writing, or when an agreed number of block confirmations to the named address can be shown on a public block explorer, as the agreement states.
  6. Release. The firm wires the dollars to the seller's bank account in the seller's own name. If delivery does not happen by the deadline, the dollars return to the buyer's account.

Why the release condition matters

Because the firm does not handle crypto, it relies on objective evidence of delivery. The best conditions name the exact receiving address, the amount, the number of confirmations, and who must confirm. Ambiguous conditions such as "upon successful transfer" invite disputes. More in writing clear release conditions.

Licensing note

Businesses that exchange or transfer digital assets for others may need licenses under state law, including California's Digital Financial Assets Law. Each party is responsible for its own licensing and tax obligations. The firm's role is limited to holding dollars in trust for its client.

Red flags

  • A seller who wants the dollars released before coins are sent.
  • Requests to send dollars to a third party's account.
  • Pressure to skip identity checks because "crypto is anonymous."

To discuss a trade, contact the attorney.

This article is general information, not legal advice for your situation, and does not create an attorney client relationship. Laws change; please consult an attorney about your own transaction.