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How to Spot and Avoid Scams When Trading on any Bitcoin or Crypto P2P Platforms

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You will understand how to spot and avoid scams when trading on any Bitcoin or Crypto P2P Platforms

Due to the increased effects of the economic crash that has gulped Africa, Nigeria not being an exception, there has recently been a growing appetite for the vast knowledge of the cryptocurrency across Africa and around the world.

People, especially young Nigerians who have decided to make good use of the idea of digital money, investments and savings to alleviate poverty, hardship and recession are popularly coming into the cryptocurrency space.

This obviously is a good development but it has also come with the dreadful consequence of consistently having to deal with cyber fraudsters. The rate of crypto fraud though has significantly reduced in 2020, still exists.

Have you been looking for an eye-opener? Probably someone to tell you all there is to ensure the security of your digital asset? Then perhaps this article is for you as it will solely enlighten you. In this article, we will discuss: 

  • What Bitcoin P2P platforms are
  • Common frauds on any P2P platform
  • How to avoid scams on any Bitcoin P2P platform

What are Bitcoin P2P Platforms?

A bitcoin/crypto peer-to-peer (P2P) service is a direct person to person transaction with the help of a trusted escrow service provider. Popular P2P platforms include: Paxful, Binance P2P, Localbitcoins etc. 

Read Also: How Nigerians Buy and Sell Bitcoin Making Money Through P2P Markets in Nigeria.

There are other platforms for buying bitcoin and other crypto in Nigeria using Naira including: Quidax, Luno, Paxful, Bundle Africa amongst others. All of them have been wonderfully designed to be user- friendly for beginners and other traders.

Some advantage of using the P2P markets like Binance P2P, is that you have the opportunity of trading against many other international fiat currencies like the Chinese Yuan, Kenyan Shillings etc. It also provides you with the leverage of buying and selling foreign currencies and redeeming payments worldwide with the supported payments method amongst others.

Types of Frauds on P2P Platforms: There are different crypto frauds on bitcoin/crypto P2P platforms and they include: 

  • Delayed Payments
  • Intentional payment reversal (chargebacks)
  • Reporting payment to the bank as fraud.
  • Off-escrow manipulation.
  • Inducing panic for a faster release of funds on fake alerts.
  • Fake Transaction Alert
  • Convincing you to send a different (usually more) amount than the agreed amount, on claims to release more funds.
  • Only use the specified payment methods allowed.

These are the seven common styles used in Bitcoin P2P platforms to initiate or carry fraudulent transactions. 

How to Avoid Scams on any P2P platforms:

  • Confirm Receipt of Payment by checking account balance.
  • Mitigate transaction reversal by transferring out received funds.
  • Transfer out received funds via bitcoin or crypto to avoid falling victim to fake bitcoin transactions.
  • Strictly follow instructions provided by the escrow platform before initiating transactions.
  • Confirm all receipts and keep track of all transactions after payments
  • Only focus on verified and confirmed merchants or users.
  • Only use specified payment methods.

Using p2p platforms requires full attention and be conscious of fraudulent transactions. Do not assume any successful transfer, only verify and confirm successful transfers yourself before proceeding further or finalizing any transaction initiated. 

Note: Only trade using specified payment methods.

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