user48235: I read an article about China ban on exchange, which mentions that 

... the ban on exchange-based cryptocurrency trades will not extend to over-the-counter (OTC) transactions. 

I am confused over the terms exchange-based and OTC. What are the differences between these two?

user59743: Exchange-based transactions, ;

Exchanges bring together brokers and dealers who buy and sell these objects. These various financial instruments can typically be sold either through the exchange, typically with the benefit of a clearinghouse to cover defaults, or over-the-counter (OTC), where there is typically less protection against counter-party risk from clearinghouses,
This is the case if you for example buy altcoins on Bittrex.com, Or poloniex.com All these transactions Are ""Exchange-based".

This means in the case of cryptocurrencies, that it is done through a third party, and you don't know the seller of the currency.
OTC transactions : 

Over-the-counter (OTC) or off-exchange trading is done directly between two parties, without the supervision of an exchange. It is contrasted with exchange trading, which occurs via exchanges.


48235: <p>I read an article about <a href="http://fortune.com/2017/09/11/china-bitcoin-exchange-ban-otc-trading/" rel="nofollow noreferrer">China ban on exchange</a>, which mentions that </p>

<blockquote>
  <p>... the ban on exchange-based cryptocurrency trades will not extend to over-the-counter (OTC) transactions. </p>
</blockquote>

<p>I am confused over the terms <em>exchange-based</em> and <em>OTC</em>. What are the differences between these two?</p>
 59743: <p>Exchange-based transactions, ;</p>

<blockquote>
  <p>Exchanges bring together brokers and dealers who buy and sell these objects. These various financial instruments can typically be sold either through the exchange, typically with the benefit of a clearinghouse to cover defaults, or over-the-counter (OTC), where there is typically less protection against counter-party risk from clearinghouses,</p>
  
  <p>This is the case if you for example buy altcoins on Bittrex.com, Or poloniex.com All these transactions Are ""Exchange-based".</p>
</blockquote>

<p>This means in the case of cryptocurrencies, that it is done through a third party, and you don't know the seller of the currency.</p>

<p>OTC transactions : </p>

<blockquote>
  <p>Over-the-counter (OTC) or off-exchange trading is done directly between two parties, without the supervision of an exchange. It is contrasted with exchange trading, which occurs via exchanges.</p>
</blockquote>
