Peer-to-peer (P2P) trading is an easy way to sell crypto assets for cash. You can use this method of trading to sell your assets directly to a willing buyer, hence the term P2P.
The best thing about it is that you get to sell the assets and get paid in your local currency.
P2P trading also costs nothing if done on a centralized crypto exchange such as Binance. However, just like any transaction in the crypto space, there are risks associated with P2P trading.
If you don’t know and take precautions concerning these risks, you can get in trouble in the course of your trading and it can cost you all your investment. In this guide, we list some of the most common scams in P2P trading that you should note.
Phishing is a common type of scam in the cryptocurrency space and it is common with P2P trading. It is a type of malicious attack in which the attacker uses a fake profile to trick the victim into voluntarily giving them their wallet details.
In P2P trading, the scammer may send the victim an email claiming to be the P2P platform. This email may contain a link which if the victim clicks on and provides details, can become the victim of a phishing scam.
To avoid this scam, do not click on any unknown links in emails or sms until you verify the source of the link. Also do not open emails from any sources that claim to be customer service, and only seek help from verified customer service channels.
In P2P trading, you have to send the payment to the seller before they release the funds to you. However, some buyers can still scam you by requesting for a chargeback after sending you the payment and receiving the assets.
This feature can be enabled on the payment platform and the scammer usually pays through a third-party account.
Payment methods like cheques and online wallets also allow for easier chargeback requests. To prevent this kind of scam, do not accept payment from third party accounts because people with intention of pulling chargeback scams mostly use third-party accounts.
Similar to chargeback scams, scammers using wrong transfer scams attempt to get a refund but by claiming that they made a wrong transfer.
After sending you payment for the crypto asset you sold, the scammer can then contact their financial institution and say it was a wrong transfer.
A big red flag is when they try to dissuade you from reporting the scam, suggesting that crypto transactions are illegal in the first place.
You should go ahead and report the scammer all the same, with evidence of your conversations with the scammer and anything else that can help your case.
To prevent this, always keep record of your correspondence with every buyer you sell to as well evidence of the transaction.
Fake Proof of Payment
Another way scammers may try to cheat you is by sending you fake evidence of payment. They can digitally alter receipts of payments and send them to you, demanding that you release the assets. You may receive an sms suggesting that you’ve received the expected payment.
However if you release the crypto assets, you may end up realizing that it was a scam after releasing the assets and it will be too late.
To prevent this, you should always check your bank account to ensure that full payment has been received before releasing the assets. Never release assets based on an sms alert you receive.
P2P trading is good and usually the best way to sell or buy crypto assets using your local currency. Many people ignore these warnings concerning scams though, and they end up being victims of the scams.
Just keep them in mind and exercise caution everytime you trade P2P and you should be fine.