P2P (peer-to-peer) crypto trading has taken centre stage today. Millions of people all around the world buy and sell assets like USDC, USDT and MATIC directly with each other.
However, in an ever-changing world, P2P crypto merchants must put extra effort to stay safe. In countries like India, Pakistan, Indonesia, Nigeria, Argentina and others there are several scams that P2P merchants much look out for.
In this article, we give some tips for P2P crypto merchants to navigate the P2P landscape safely and efficiently.
Recognizing Common P2P Scams
a. Payment Reversals
One of the most prevalent scams in P2P crypto trading is payment reversals. Fraudsters execute a fiat transaction, get the cryptocurrency, and then reverse the fiat payment. It’s essential to recognize this tactic and ensure all payments are fully cleared and irreversible before releasing any crypto.
If you are trading on a centralised exchange that allows users to use their credit cards for P2P transactions, be extra careful, as credit card payments are the easiest to reverse.
b. Counterfeit Money or Checks
Another common scam revolves around the use of counterfeit currency or checks. These days due to high volume of P2P scams, crypto P2P merchants are choosing to meet in person and do trades face-to-face. Here, scammers might offer a higher-than-market price to lure unsuspecting merchants, or pay with a mix of genuine and counterfeit notes.
If you are going to trade crypto face-to-face, always make sure that you meet in a public place, and if possible, try to limit the size of your first transaction with any new person.
c. Phishing Attempts
Cybercriminals often impersonate trusted platforms or individuals to steal login credentials or other sensitive information. Always double-check URLs, email addresses, and never share your private keys or passwords.
Last year, many people lost expensive NFTs and some of them even got their whole wallet wiped because they trusted someone pretending to be from MetaMask. If you are uncertain about a certain person or a message, always try to validate the sender.
If they reach out to you on Twitter, then check their account and see if they are genuine. Always ignore if they reach out to you on Discord, especially if they send you a DM.
Essential Safety Measures
a. Use a Reputable P2P Platform
Always opt for a platform with a robust reputation and security framework. Here, it is better to go for platforms that focus solely on P2P instead of platforms that offer many services in addition to P2P.
While big platforms are generally safe, the bigger they are, the higher the chances of a scammer lurking in its depths. also, bigger platforms are more likely centralised, which means that they can lock you out of your account anytime.
In such cases, it is recommended to withdraw your crypto to your own wallet, or simply use decentralised P2P exchanges like OpenPeer that let you trade directly from your MetaMask or Trust Wallet.
b. Secure Your Account
Use strong, unique passwords for your trading accounts. Moreover, enable two-factor authentication (2FA) for an added layer of security. If possible, try to login using your wallet address, since this is safer than logging in via a username and password.
Some platforms let you create accounts using your wallet address, and some of them like OpenPeer even pay the gas fees necessary to make transactions on the platform.
c. Never Share Personal Details
Be cautious about sharing unnecessary personal details or sensitive information. Keeping your identity somewhat anonymous can be a shield against potential fraud.
Unfortunately, this is one area where centralised exchanges do the worst. Many times, they require you to give a lot of information even if you have to make a one-off transaction. If you are particularly concerned about your privacy, we recommend you to try decentralised crypto P2P alternatives like OpenPeer or other popular ones in your country.
d. Conduct Due Diligence on Buyers/Sellers
Before transacting, vet and verify your trading partners. Check their trading history, feedback scores, and be wary of newly created accounts. Many platforms let traders give each other a star rating. But don’t rely solely on the star rating.
Instead, try to see the number of trades they have completed and the number of people who have given them a rating. Someone with 4.8 stars and 124 ratings with 600 transactions is much safer than someone with 5 stars but only 20 ratings and 100 transactions.
Tips for Secure Transactions
a. Use an Escrow Service
Escrow services act as a trusted third-party that holds the cryptocurrency until both parties fulfill their end of the deal. It’s a reliable way to ensure the security of transactions.
Most centralised and decentralised exchanges have escrow services in place. The advantage of decentralised exchanges, though, is that their escrow contracts are open source, so you can review the code of the escrow contracts yourself.
b. Document Every Step
Maintain a clear record of all your communications and transactions. Such documentation can be crucial to verify transactions or in case of disputes.
People who have fallen prey to P2P scams were able to resolve their issue faster when they had clear documentation of all the steps they took leading to the transaction.
c. Be Wary of Pressure Tactics
Fraudsters often rush or pressure merchants into making hasty decisions. Take your time, and if a deal seems too good to be true, it probably is. Also, most exchanges have a time limit of 10 to 15 minutes. Don’t hesitate to use a few more minutes if you need them to be extra sure.
What to Do if You Encounter a Scam
If you suspect you’ve fallen victim to a scam, immediately report it to the platform administrators. All platforms have a
contact us section on their websites, as well help available in the Discord servers. Reach out to the core team via email or drop a message in their Discord server.
Depending on the severity, you might also want to consider alerting law enforcement.
After your issue is resolved, it is recommended to share your experience in forums and groups to help others stay informed. The crypto community thrives on collective vigilance, and posts on forums and groups save a lot of people and keep others informed.
The Role of Community
Active participation in merchant communities can be a game-changer. These platforms allow members to stay updated on the latest scams, share experiences, and provide a support system for newcomers.
Try and find active merchant communities in your city. Being connected with other merchants close to you can help you stay updated with what’s happening in your city and help you learn about any new opportunities.
In case you can’t find a community or if one simply doesn’t exist, create one! You have no idea how many merchants may come if you simply create a Telegram group or a Discord server.
Safety should always be paramount in P2P crypto trading. While risks are inherent in any financial transaction, by following best practices and staying informed, merchants can significantly mitigate these threats.
Crypto P2P trading remains the best way for people in developing countries, especially where the inflation is high, to access dollars and preserve value in times of uncertainty. It is also a livelihood for a lot of people in these countries, and when done right, can open a whole new world for you.
For a secure and efficient P2P crypto trading experience, consider joining OpenPeer. We are a decentralised and self-custodial P2P exchange, so you can trade directly from your MetaMask and Trust Wallet and always stay in control of your crypto at all times. Visit our website to learn more or directly check out our platform here!