Key Takeaways
- P2P transactions have become an increasingly popular way for users to exchange cryptocurrencies as they offer flexibility and the ability to choose their transaction terms.
- The warning signs of crypto P2P scams are everywhere. They include suspicious payment methods, pressure tactics, and unrealistic offers that seem too good to be true.
- Never mark a trade as completed before checking your account or crypto wallet to confirm that you’ve received the funds that are supposed to come your way from a P2P trade.
Peer-to-peer (P2P) crypto trading platforms are mostly safe and secure, but their popularity has attracted scammers who lurk around seeking to defraud users. This article explains the most common crypto P2P scams of 2025 and how to spot them and avoid becoming victims.
Understanding P2P Crypto Trading
Peer-to-peer (P2P) crypto trading platforms are online entities that enable users to purchase cryptocurrencies with government-issued money and sell their digital assets directly without third-party interference. In a typical P2P setting, users contribute an equivalent amount of shared and earned data or value. The earliest recorded usage of P2P was introduced in 1979 by Usenet to enable users to exchange messages.
In the context of digital assets, P2P transactions were greatly influenced by Bitcoin’s original idea, which aimed to eliminate centralization and maintain user privacy. Transactions on P2P networks don’t require third parties to complete them. In that case, the P2P platform could be said to be the only third party that acts as the service provider and creates means to monitor trades and prevent crypto P2P scams.
The P2P concept adopts safe emerging technologies that secure transactions between the two parties. Blockchain technology confers what P2P enthusiasts consider state-of-the-art security advantages, such as transactions being recorded on both peers’ networks, making it practically tricky and computationally impossible for any user to falsify or overwrite transactions on the network.
Features of P2P Trading
In a basic P2P transaction, every participant offers terms of the transaction that the second party can agree to or provide new ones if dissatisfied, making the concept one of the most popular and flexible ways to exchange digital assets. The most significant advantage of P2P trading is avoiding the high commissions you could typically pay in a centralized exchange. For example, you can save a considerable amount in transaction fees when you make transfers via P2P.
Crypto P2P platforms offer convenient payment methods, including credit/debit cards, bank transfers, and e-wallet services. The wide variety enables users to buy and sell digital assets in optimal conditions. According to a study by Allied Market Research, P2P crypto trading has surged in popularity, and its use is expected to reach $558.91 billion by 2027, with a compound annual growth rate of 29.7%.
However, like all other ways of exchanging assets, crypto P2P trading involves risks because it has also attracted fraudsters. The absence of a third-party supervisor makes crypto P2P trading a fertile ground for related scams and fraud.
What are Crypto P2P Scams?
Crypto P2P scams refer to scenarios where fraudsters exploit a user’s carelessness to steal their data or funds. Since participants interact directly with each other in P2P transactions, there’s always the risk of a user falling for a criminal who uses any of the known P2P fraud schemes to defraud an unsuspecting user. Moreover, users find it extremely difficult to resolve disputes or get refunds if they encounter scammers.
The Most Common Types of Crypto P2P Scams
Everyone wishing to buy or sell cryptocurrency on a P2P platform must realize the risk of encountering dozens of money-grabbing scams. While you may not be able to memorize every one of them, you’re better off familiarizing yourself with the most common ones:
Proof of Payment Scams
This type of scam involves the fraudster digitally manipulating screenshots to falsely show that they have fulfilled their part of the transaction. They will then start pressuring you to release your digital assets or funds without giving you a chance to verify receipt of payment. SMS scams are the most popular proof of payment fraud, where fraudsters send SMS texts similar to the notifications you receive from wallet apps or banks. The messages falsely claim that you have received payments from the counterparty.
You can avoid falling victim by:
- Always verify your bank account or e-wallet balance to confirm that you receive the funds before you mark the transaction as complete. Never unthinkingly rely on the content of the text message you receive.
- A counterparty who insists that you release funds or digital assets before confirming the arrival of payments should be a red flag.
Chargeback Scams
In this trap, the fraudsters initiate a chargeback and retract their payments to their trading counterparts. In some cases, they use third-party accounts so they can easily attempt to reverse transactions. In most cases, they would insist on paying you via check deposit because it would be easier for them to request a chargeback from a check payment.
You can easily sidestep chargeback crypto P2P scams by:
- Confirm that the counterparty’s verified name on the P2P platform matches the payment details.
- Never accept payments from third-party accounts.
- Consider any counterparty insisting on a check payment a red flag.
Man-in-the-middle (MitM) Scams
Fraudsters using this scam will pretend to be reputable representatives of a P2P platform and contact you via external channels like social media networks, WhatsApp, or Telegram to ask for bank account details. They ask victims to copy these details into a fake order page on the P2P chat. The victim then unknowingly shares the scammer’s bank account details with another unknowing buyer on the P2P platform, allowing them to release their crypto to the buyer, who then sends money to the fraudster’s bank account.
To avoid getting involved in MitM scams, you must:
- Always communicate with counterparties on the official P2P platform and never engage in any transaction outside of it.
- Remind your counterparty that third-party transfers violate P2P transaction laws.
- Countercheck the counterparty’s account details with the P2P platform.
- Avoid engaging with users, preferring external channels when trading.
Triangle Scams
Triangle crypto P2P scams usually involve two scammers placing their orders simultaneously with the same seller, aiming to exploit the seller’s trust and sense of urgency so they can release funds without proper verification. For example, the first scammer can make an order for 2,000 USDT, and scammer B can make an order for 3,000 USD. The second scammer transfers the 3,000 USDT to the seller, while the first scammer marks their order as paid. The unsuspecting buyer releases their crypto to the first buyer, thus completing the order for 2,000 USDT. In contrast, the second scammer sends another 1,000 USDT to the seller and provides the 2,000 USDT payments as proof they received from the first scammer, then pressures the seller to release their USDT under the second order. During the confusion, they will pressure the seller to release funds, and it’s only much later you will realize you paid twice but only received half or less of what you bought.
The easy way to avoid the triangle scam is to ensure that you:
- Always confirm receiving all funds from any pending P2P transaction before you release your crypto assets.
- Be careful when scrutinizing proof of payment from counterparties because fraudsters habitually reuse them.
Imposter Scams
Some crypto P2P scammers impersonate platform employees to try to deceive users and steal their funds. They usually contact their would-be victims using unofficial emails and request sensitive information that they use to initiate fraudulent transactions. Besides asking questions to confirm your account details, they could also send phishing emails similar to official communication to trick users into releasing their crypto before receiving payment.
You must always remember the following so you can stay safe:
- P2P platforms never ask users to complete transactions via email. Moreover, funds will only be released after you have confirmed receipt of payment.
- Ensure that counterparties submit payments via specified methods and that details match the other party’s verified name.
- Be very careful about unsolicited external offers
Conclusion
P2P crypto trading can be exciting when you learn the proper things to do and how to detect and avoid P2P crypto scams. Since there are thousands of scammers out there waiting for a chance to pounce on you when you lower your guard, you need to stay focused and mindful of the attendant risks by prioritizing your security. Always watch for red flags, shield your account details, and verify carefully before releasing your funds.