Cryptocurrency trade fraud is on the rise, particularly on peer-to-peer (P2P) networks. Since the Bitcoin industry has grown so rapidly, P2P networks have gained popularity as a way for consumers to buy and sell swiftly without the need for middlemen. But this straightforward approach also leaves gaps that crooks might take advantage of. Let’s take a closer look at typical scams and how to prevent them.
Common P2P Frauds To Look Out For
1. Fake payment confirmation
This is among the most popular frauds. The fraudster will email you a screenshot or a false transfer notice, leading you to assume you completed the payment. In actuality, the funds have never been put into your account.
Identification signs:
- They want you to promptly release your Bitcoin after delivering the snapshot.
- The photographs lack specifics or information that matches up with the real transaction.
How to Avoid It:
- Always access your bank account or wallet directly. Never rely on screenshots or notifications from your business partners.
- If you are utilizing a cryptocurrency wallet, please verify the transaction using the platform’s verified transaction history.
2. Overpayment techniques
A fraudster may purposely send you more than the agreed-upon amount, then claim the error and ask you to reimburse the difference. When you issue a refund, they can use the bank’s chargeback system (request a refund) to recover the entire original amount. As a result, you will lose both your money and your cryptocurrencies.
Identification signs:
- The other party sends more than the agreed-upon amount without explanation.
- The party asks you to expedite your refund request.
How to Avoid It:
- Refunds will not be granted until the transaction is completely confirmed.
- If you find an extra sum in your account, maintain it as is and notify the trading platform for help.
3. Transactions outside of escrow
One of the most hazardous scams is the fraudster convincing you to finish the transaction outside of the platform’s escrow mechanism. Escrow is an intermediate service that protects both buyers and sellers. If you trade outside of escrow, you have no recourse against the platform in the event of a disagreement.
Identification signs:
- Scammers exploit the excuses of “saving fees” or “faster transactions” to persuade you to bypass escrow.
- They request a straight transfer or meet to finalize the transaction.
How to Avoid It:
- Do not trade outside the margin system. This is your primary line of protection against potential threats.
- If the other side declines to use the escrow, please discontinue trade right away.
How to Prevent P2P Scams?
Strict safety procedures may greatly lower your chance of falling victim to a scam.
Choose recognized platforms
Always trade on known, reliable sites that offer safe escrow services. Several prominent platforms include:
- Binance P2P
- Bitcoin locales
- Paxful
These services not only provide escrow, but also other security features such as user identity verification, 24-hour support, and fraud reporting tools.
Check Buyer Reputation
Give priority to clients who have a history of success. Find companies that have done at least 1,000 jobs and have a high success rate. So, you’re less likely to come into contact with fraudulent individuals.
Examine Feedback
Take note of the negative remarks or cautions made by other users. It’s recommended to steer clear of the transaction completely if many traders point to possible fraudulent activity.
Know the Terms and Conditions
Carefully review the buyer’s terms of service prior to completing any deal. Ask for clarification if anything appears confusing or too complicated, or think about not going through with the deal.
Check payments carefully
Never release your cryptocurrencies before you have thoroughly verified and confirmed the transfer of sums to your account. If you are unsure about the status of your bank transaction, please contact the bank directly.
Keep cool and don’t rush
Scammers frequently push, intimidate, or coerce you into making a rapid decision. Do not allow impatience to get the best of you. Take the time to review every aspect of the deal.
Report promptly if you see symptoms of fraud
Most respectable trading platforms offer a support crew that handles fraud-related concerns. When you see strange indicators, here’s what you can do:
- Report to the platform on an immediate basis.
- As a safety measure, keep record of all transaction-related information, such as messages, receipts, and account information.
Conclusion
Protecting your cryptocurrency investments necessitates extraordinary care and comprehensive understanding. Don’t let subjectivity or a lack of knowledge provide an opportunity for harmful scams out there.
