What are the risks if we accept 3rd party payment while dealing localbitcoin

Findingnemo

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Bitcoin = Financial freedom

Quote from: AdolfinWolf on September 07, 2019, 12:25:25 PM

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With my current trading volume I can create upto 16 advertisements so I had some high risk payment with good margin amount,but there is something alarming while doing such for the recent days which is lot of newly created accounts from Nigeria requesting bitcoins and want to pay from bank account from my country I doubt this could be an hacked account transactions so I decided to disable that ad.

Now only dealing with the people,Verified name on LBC,Real name must match with the Bank account name and also One time National provided ID verification.

I feels that I am safe with the above criteria to deal with me.

AdolfinWolf

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Quote from: Findingnemo on September 07, 2019, 12:25:15 AM

Quote from: AdolfinWolf on September 06, 2019, 02:06:41 PM

Quote from: Findingnemo on September 06, 2019, 12:18:05 PM

I have been doing trades on LBC,so I need to figure out I am in trouble if I accept 3rd party bank transfers.

As far as I know people can use you for drug purchases when it is illegal in your country and like other crimes but we are in trouble if people doing this?

I don't think you're liable for what other people do with the bitcoin they bought from you. That would be weird.

Localbitcoins already asks people to verify their ID before they can trade, so you're already doing/participating/complying in AML- Anti-Money-laundering laws.
So, in the case of someone trying to launder money through you, or use hacked bank accounts, you'll be able to report them using their KYC submitted to LBC, (or not be liable for their actions at the very least, since you can point towards the KYC they submitted).

But I can see that people without verified name also available and requesting on LBC,they might have very less annual volume but if their intention is to launder the money they can open hundred of account and convert their money right.

And also how to report if I found anything suspicious about the trader,need to create the support ticket and what to mention on it?

Hmm. I thought everyone who wanted to trade on LBC needed to verify himself.
- Looks like it's not for under 1000$.
https://btcxlab.com/starting-september-1-localbitcoins-introduces-mandatory-verification-for-platform-users/

Quote from: PrimeNumber7 on September 07, 2019, 11:42:10 AM

I would suggest that you don’t do this. If the service you are using is specifically intended (based on their TOS) for transfers between your own accounts, it will appear that any fraud involved in the transaction was something you were a part of.

There are enough databases of usernames/passwords freely floating around (even if not banking related), that I would assume there to be a high risk of any one person sending fiat to me to have their bank account hacked.

If you accept these transactions from many people, I would expect at best for you to be questioned by your bank and or the police about at least one transaction, which will be a big hassle. Realistically, you will have your bank accounts closed and you will have difficulty opening new bank accounts.

I would not trade coin for anything except for cash to someone who I don’t know well on any ongoing basis.

That's... Really pessimistic. There are tons of traders making a living off of legit P2P trades on localbitcoins/Paxful using paypal (to a lesser extent), skrill, webmoney/bank transfers/credit card payments

PrimeNumber7

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I would suggest that you don’t do this. If the service you are using is specifically intended (based on their TOS) for transfers between your own accounts, it will appear that any fraud involved in the transaction was something you were a part of.

There are enough databases of usernames/passwords freely floating around (even if not banking related), that I would assume there to be a high risk of any one person sending fiat to me to have their bank account hacked.

If you accept these transactions from many people, I would expect at best for you to be questioned by your bank and or the police about at least one transaction, which will be a big hassle. Realistically, you will have your bank accounts closed and you will have difficulty opening new bank accounts.

I would not trade coin for anything except for cash to someone who I don’t know well on any ongoing basis.

Findingnemo

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Bitcoin = Financial freedom

Quote from: AdolfinWolf on September 06, 2019, 02:06:41 PM

Quote from: Findingnemo on September 06, 2019, 12:18:05 PM

I have been doing trades on LBC,so I need to figure out I am in trouble if I accept 3rd party bank transfers.

As far as I know people can use you for drug purchases when it is illegal in your country and like other crimes but we are in trouble if people doing this?

I don't think you're liable for what other people do with the bitcoin they bought from you. That would be weird.

Localbitcoins already asks people to verify their ID before they can trade, so you're already doing/participating/complying in AML- Anti-Money-laundering laws.
So, in the case of someone trying to launder money through you, or use hacked bank accounts, you'll be able to report them using their KYC submitted to LBC, (or not be liable for their actions at the very least, since you can point towards the KYC they submitted).

But I can see that people without verified name also available and requesting on LBC,they might have very less annual volume but if their intention is to launder the money they can open hundred of account and convert their money right.

And also how to report if I found anything suspicious about the trader,need to create the support ticket and what to mention on it?

malevolent

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Someone sends you fiat money from a hacked bank account, the victim reports a crime, and now you're out of the money and out of the bitcoins. If it keeps happening have fun explaining yourself in front of authorities or having your bank(s) close your account(s). That's why it's such a shame LBC no longer support in-person cash trades (except in a handful of countries, I think), there was nothing better than that to guard against fraud (at the expense of having to be relatively vigilant during the in-person trade).

In most countries as long as you pay your taxes on what you make from trading, you're alright, but as evidenced by numerous arrests in the US, paying taxes isn't enough, if you're active enough on LBC you also have to go through a bullshit licensing process and spend a lot of resources on the whole compliance BS.

As to people who got arrested because they got baited into admitting they'd help pretend-criminals commit crimes, what where they thinking?

AdolfinWolf

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Quote from: figmentofmyass on September 06, 2019, 02:45:14 PM

why did he do it? because they paid him a huge premium (something like 40%) over the spot price. that's another thing---if it sounds too good to be true, it probably is. very important statement to live by in the world of p2p trading.

I think this really varies from which payment processor you use. On paxful it's completely normal to ask 10-20-30% for a transaction involving Paypal (Due to the reversible nature). It's not that weird, and for smaller transactions a lot of people are happy to pay such amounts. (For some reason i've also not completely figured out yet..)

But if it involves a non-reversable method you should indeed place some red flags, - especially if you're the one being approached.

figmentofmyass

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if a p2p trader ever tells you their funds are illicit proceeds, walk away immediately and do not complete the transaction. this is how several localbitcoin traders have been arrested. morgan rockcoons got money laundering charges because he accepted USD that undercover agents said was proceeds from an illegal hash oil operation.

why did he do it? because they paid him a huge premium (something like 40%) over the spot price. that's another thing---if it sounds too good to be true, it probably is. very important statement to live by in the world of p2p trading.

AdolfinWolf

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Quote from: Findingnemo on September 06, 2019, 12:18:05 PM

I have been doing trades on LBC,so I need to figure out I am in trouble if I accept 3rd party bank transfers.

As far as I know people can use you for drug purchases when it is illegal in your country and like other crimes but we are in trouble if people doing this?

I don't think you're liable for what other people do with the bitcoin they bought from you. That would be weird.

Localbitcoins already asks people to verify their ID before they can trade, so you're already doing/participating/complying in AML- Anti-Money-laundering laws.
So, in the case of someone trying to launder money through you, or use hacked bank accounts, you'll be able to report them using their KYC submitted to LBC, (or not be liable for their actions at the very least, since you can point towards the KYC they submitted).

As long as you report your earnings, and comply whenever required(when someone trades with you using a hacked bank account), you should be OK. (Although most often there isn't much to comply really when someone chargebacks you just have to take the fall usually.)

note: IANAL. Just my personal experiences.

Another note is that it varies from bank to bank, and whether or not you have a business account registered with all the paperwork etcetera stating what your business (model) is. If you have a personal account getting 10+ transactions a day from people all over the world, it might look pretty weird real soon, and they'll start asking you for proof of income etc.
It depends on the bank, but still.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

I have been doing trades on LBC,so I need to figure out I am in trouble if I accept 3rd party bank transfers.

As far as I know people can use you for drug purchases when it is illegal in your country and like other crimes but we are in trouble if people doing this?

Topic: What are the risks if we accept 3rd party payment while dealing localbitcoin (Read 182 times)