Counterparty risk is the chance that the other side of a deal does not do their part - does not pay, pays and then reverses it, or delivers something other than what was agreed. Every trade carries some; the question is how it is managed.
P2P platforms reduce it with escrow: the seller's crypto is locked until the order completes, which protects the buyer. What escrow cannot fix is the payment leg in the banking system. That is why sellers confirm the money has actually arrived, from an account in the buyer's own name, before releasing. Price tells you what you might gain. Counterparty checks decide whether you get to keep it.
💬 What's the first thing you check about a P2P counterparty?
Binance Academy covers this in more depth: https://www.binance.com/en/academy/glossary/counterparty-risk
Next lesson: Order book, OTC and P2P: three ways to trade
Trading crypto from Dubai since 2019.
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