What Risks Are Associated with Cross-Exchange Crypto Arbitrage?

The primary risks include execution risk, where the second leg of the trade cannot be filled at the expected price due to market movement or slippage. Counterparty risk exists if an exchange defaults or freezes funds.

Withdrawal and deposit delays can cause the opportunity to vanish. Regulatory risk is also present as crypto rules are evolving.

Funds transfer risk is also a factor.

What Are the Risks Associated with the Transfer of the Underlying Asset Itself?
How Can a Crypto Derivatives Exchange’s Insurance Fund Structure Be Compared to a Mutualized Default Fund?
What Is the Risk of a Blockchain Network Failure during the Settlement Window?
How Can a “Pull” Model Introduce Potential Settlement Delays for Options Contracts?
Why Is Triangular Arbitrage Considered Less Risky than Cross-Exchange Arbitrage?
What Is ‘Counterparty Risk’ in the Context of Centralized Crypto Exchanges?
What Are the Primary Risks Associated with On-Chain Settlement of Large Derivatives Trades?
What Is the Concept of ‘Regulatory Arbitrage’ in the Crypto Space?

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