Topic: What are the ways I can get scammed on a P2P platform such as localbitcoins? (Read 237 times)

Only as much as they would be with any fiat bank transaction, unless you choose to supply additional details. In most jurisdictions when you wire money to someone else, they will at a minimum be able to see your name and account number on their bank statement or online account. Some countries or some banks may provide more information - you'll have to check with your own bank to find out exactly what the other party will learn about you

Some traders on DEXs may request additional information. If you do not want to provide this, then simply find someone else to trade with.

The other partner is privy to which bank account sent/received the funds?

Was the real scammer arrested in an non Western nation?

The social engineering posts also brought back some memories of some other trades I've almost done.

There are people who utilise LBC to money launder, and back in previous days, accounts were given very small limits before they were banned/forced to add their ID before they could trade anymore. I remember finding a guy who would initiate trades for 500-1000 dollars, and then "accidentally" deposit/transfer an extra 5 thousand or so. The buyer will usually tell you oh, just send me x amount of BTC outside of the site (usually with a very good fee). They usually do this with reputed traders (I was someone with 5-10 BTC worth of volume), so they won't just run away.

This is similar to the scam where scammers will just hire unsuspicious looking people to buy bitcoin off people, using laundered funds.

Basically, OP, be wary of new-ish accounts wishing to buy your bitcoins, if you are not a regular trader, use the most popular buyers, but if you wish to set up personal ads (which I recommend, as you save a lot of money) make sure to do your due diligence with who you are trading with.

Social engineering scams are easy to identify even though they are the best way to scam someone. I have a checklist when it comes to this kinds of attack.

• If you suddenly felt an extreme positive emotion or sometimes negative emotion when you read an email or something in the possibility then the chances are higher that it is a social engineering attack. To combat this, try to compose yourself and take breathers, a calm and collected mind is the weakness of this kind of attack.
• If the latter does not happen, then there will be a sense of urgency that will be imposed upon you by the perpetrator, this is a tactic among scammers to make you think under pressure which makes you do stupid things.
• If possible try to meet the person from the other side of that message, that way you can easily identify him/her if they have a record about scamming people.
• Common sense is the big factor too, if you know that you haven't encountered that group/person in the first place then best is to ignore them. Works 10 out of 10

This probably should go without saying, but be on the look out for social engineering, or ways that the seller/buyer can influence your view, and convince you to do something other than the accepted practice. The thing is with any person to person interaction, you are allowing them to be able to use their initiative, and potentially skirt around the process. This is how most scams are done, basically they make up an excuse, or they send a link, and get you to log in to something, or anything like that. As already mentioned, whenever they ask you to go off site, ignore it, and probably cease dealing with that user. Since, if they've tried to get you off site, even if you were to successfully go through the official site, then you don't know if they actually own that money, they are sending you.

Centralized exchanges, you don't have to worry about that since you are usually dealing with a automated system, but once you introduce a chat system, which a few P2P exchanges have implemented, you have to be on guard against social engineering techniques.

Not so much with LBC, but with others there is a real risk of the exchange going rogue and you not being able to withdraw your funds.

Also, this is often neglected but people have to realise that there is a compliance risk as well. There is every possibility that these p2p exchanges decide to freeze your funds one day simply because they suspect dodgy behaviour from your account.

Apart from that, if you follow the escrow rules and don't cut corners you are 99.9% protected. I've dealt with scammers before but the support was always prompt in resolving the case.

I tend to agree and this is possible to happen, that's why it might be good if you will use a mixing service before you will transfer your Bitcoin into your main or cold storage wallet and then transfer it into a custodial wallet if you want to convert it into fiat.  But this isn't related to getting scammed in the P2P exchange.

It's explained very well above, the very common to get scammed on P2P platforms is the reversible payment.  It's recommendable if you will buy Bitcoin should wait for at least 3 confirmation before sending your money.  If you will have a transaction outside of reputable P2P platforms, you will prone to get scammed.

AFAIK, the Binance P2P platform is the best because they offered escrow service.

Well, it is necessary to clarify if it is to sell as a merchant of the platform or to sell as a user, that does not take away the security range of the escrow but if the intention of fraud, because it is about who releases and who transfers, that has a cognotation associated with experience and the ability to deceive.

Some offer their telegram / whatsapp accounts as an alternative in the negotiation and that is where the associated fraud comes, you believe that you are safe because you are in a p2p but the cheater is going to take you to a terrain that can confuse you:
-Trading off the platform offering you better dividends.
-You confuse it and you release (escrow) without having received anything.
-etc
That is, the escrow in theory is safe, but it does not escape claims, bad faith, etc.
To all that add that after providing privileged banking information, you could be a victim of identity theft, attempted phishing and not to mention if you provide a phone number.

In conclusion, escrow is designed, programmed to be executed for the benefit of two people in the exchange of assets, but sometimes things like those mentioned above happen that end in fraud.

The biggest scare about p2p trading is receiving funds that have been stolen, laundered or used for fraud and are being tracked by authorities into your bank account. Many banks would consequently freeze the funds once they get notified by authorities.

I know of some trader on localbitcoins who ended up getting arrested because he received stolen funds from a trading partner. Luckily for him, he co-operated with the authorities and gave them all the details of his trading partner who was also later netted.

Other than that, If you follow procedures correctly while trading, chances are very minimal that you will get scammed.

Correct.

There is no mobile client for it as yet. There is a mobile app which you can link to your desktop software, but it is limited to providing you with notifications of trade offers and the like. Your desktop software must be running for it to provide notifications to your mobile app (and indeed, if your desktop software is not running, then any offers you have posted will not be visible to other users since there is no centralized server keeping track of offers).

Linux is a good idea, but Bisq will automatically run over Tor, so a VPN is not necessary.

So bisq is not web-based? I have to download and install their software? How good is it on the phone? Desktop through VPN and Linux I feel would be much more secure than installing and running the app on my rooted daily driver phone. What do you think?

LocalBitcoins I used to use many years ago, but I haven't touched since they introduced KYC requirements. As far as I am concerned, that makes them no better than a centralized exchanges.

Binance P2P I have no experience of, because I refuse to touch something owned by a privacy invading company such as Binance. Again, they require KYC, so I don't see the point of using them.

Hodl Hodl and LocalCryptos I have a little experience with, and have experienced no problems with either of them. LocalCryptos has a pretty interesting escrow design, based on scripts and smart contracts. You can read more about it here: https://blog.localcryptos.com/how-bitcoin-escrow-works/. I have no problems suggesting either of them to other users.

Bisq is my favorite at the moment for a couple of reasons. It is the closest we have at the moment to truly decentralized trading, and the platform mimics bitcoin itself. Rather than loading up a website (which is inherently centralized), you instead download and run their open source software on your own computer and connect directly to other users in a peer-to-peer manner over Tor. As such, it is a bit different to the others and takes a bit of getting used to, but works nicely once you get the hang of it. It has a few quirks, including limiting your volume until you are "signed" by a trusted user after successfully completing a few trades, and you have to leave the software open and running if you have posted an offer. Again, I've never had any problems with it in terms of being scammed, having trades disputed, or similar. Bisq has pretty thorough conflict resolution processes in place if needed, though.

There are different features for each peer to peer exchange. You may compare from this thread, A list of LocalBitcoin alternatives (P2P marketplaces). Here you will find a couple of exchange for peer to peer trading. You may find which exchange fit for you. If you looking for a good price then you have to choose who has a higher volume, safety depends on payment methods as explain by o_e_l_e_o, for anonymity you may choose who doesn't require KYC and how you can hide your IP address.

Localbitcoins vs localcryptos vs bisq vs hodlhodl vs binance...how would you compare them? What would you consider the top 3 from best to least when it comes to price and safety and anonymity?

The most common scam reports I see from peer-to-peer platforms usually involve reversible payment methods (most commonly things like PayPal, Venmo, etc.) If you avoid these methods and stick to methods like bank transfers, and are sure that your bank will not reverse a bank transfer, then you are largely protected from this.

The other common mistake people make is taking their communication or even their trade off platform. People might try to convince you to communicate via email, Telegram, or something similar. This is always a red flag for me, as to me it means they are trying to hide something from the platform. If something goes wrong and you need to dispute a trade, then a record of communications on the platform is vital to a satisfactory outcome. Anyone even suggesting to take the trade off platform and bypass the escrow should be avoided completely.

I can't say that you will never be scammed if you use the platform correctly, since scammers are always coming up with new techniques, but I have been trading peer-to-peer for years (recently mostly on Bisq), and have never had any issues with being scammed. As you say, if you follow the guidelines and generally use common sense, you'll be pretty safe.

Thanks o_e_l_e_o. Considering it's not possible to reverse a deposit made to an account, are there any other ways I could get scammed (provided I use the platform correctly)?

This depends on what country you live in, and who you bank with.

Presuming you have locked up the bitcoin you are selling in escrow, then you will obviously not release them until you see the bank transfer has completed. The risk then is by someone managing to reverse or cancel the transfer after you have released the coins. There are multiple ways they could do this, by telling their bank the item they bought was "not as described" (they don't need to mention it was bitcoin), by saying it was an unauthorized transfer, by saying their account was hacked, etc. Some banks/countries will allow this and contact you after they have reversed it, some will contact you first for your authorization, some will just say no. To be sure, phone your bank and ask what their policies are.

The other possibility is that the buyer is using a stolen or hacked bank account to buy the bitcoin, and the transfer will be labelled as fraud once the true owner discovers what has happened.

When selling BTC and opting for bank transfer, what exactly are the risks? Since localbitcoins and the like (hodlhodl, localcryptos...etc) use escrow, I can't see how I can get scammed. Could someone enlighten me please?