edited using canva
In my last post, I talked about how secure p2p transactions can be but at the same time, there are some risks associated with it. I talked about fake credit alert as one of the risk we must avoid and how we can avoid it.
Binance will always tell you to confirm the transaction or payment first before releasing your crypto. This is done to avoid scams of any form. Are there other scams we aren't aware of? Yes there are about 6 but I'll mention 3 in this post and 3 in my next post.
This is another serious type or means of scamming via P2P. A scammer can use a chargeback feature on their payment platform to reverse payments made after receiving assets of the other party involved in the transaction. That is to say after you have seen your parents and released the dollars, the money sent to you would be reversed back to them. In most cases, they try to pay via a third-party account and not on their own account to avoid traces.
screenshot from my phone
How can we possibly avoid this kind of scam?
We shouldn't accept payments from third-party accounts. Binance when its P2P was still active, will tell you to avoid third-party transactions to avoid scams. If this happens you need to appeal to the payment platform and initiate a refund to the buyer's account to avoid getting scammed after released of funds.
Another scam we must avoid is wrong transfer. it is more like the chargeback fraud where a scammer may attempt to steal your assets by contacting their bank to report an erroneous transaction requesting it should be reversed. Some scammers may even pressure you into not laying reports but by using tactics like the warning that selling cryptocurrency is illegal.
So to avoid this scam, we shouldn't be intimidated by the scare tactics of these scammers. All you have to do is together evidence which includes screenshots of your transaction with the criminal systematically.
In the case of man-in-the-middle attacks which is another form of scam that was trending some years back, a bad Trader would insert himself between a user and an organization or another individual and communication is done on behalf of that counter party in order to steal the assets of the one transacting or even his private keys. When I was a bit younger, I do hear this middleman drag people's assets from the middle.
How? If Trader A sent money for Trader B to transfer a huge amount of Dollars, the middleman will be in the middle to divert this dollars after Trader B has confirmed and released. To clear all tracks, they will send a fake credit alert to Trader A showing that he has received the dollars but to be frank, the dollars can't be used it becomes a literal value.
There are about three main categories this man-in-the middle attacks work. One of such is romance scam.
Once this is accomplished, they cut off all contacts with the victim. I can remember when this happened to an American. And Nigerian scammed her of $120,000 online and took off. All these happened online via romance.
Investment scam: another category is the investment scam. This involves a criminal or scammer approaching and convincing their victims into investing on a certain enterprise or project. The criminal being the middleman between the victim and the investment scheme will direct the funds of the user to wherever they wish in the name of investment and that's how the money would be gone.
E-commerce scams: this involves a scammer pretending to be an online seller with discounted prices. The pressure they are victims to buy their products in cryptocurrency. Once this is done they are gone without providing the product.
How can we possibly avoid this scam?
Limit your communication with your counterparty on a payment platform before and during a transaction to avoid scams. Don't also respond to request of trading on any social networking platform that's not legit.
In conclusion, we have seen three major scams that are likely to occur in P2P transactions. Many has fallen for this scam I will continue to if care is not taken. We have seen how bad the charge back fraud and middleman fraud is. So be wise.
Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have
