Important notes
Money transfer scams are a common threat to crypto users. These scams can be encountered in two different scenarios: in P2P trading or in daily transactions when purchasing products or services.
Always make sure that you are trading on a reliable P2P platform with robust security measures and that the other party is a trustworthy person or institution.
Have you fallen victim to such a scam? Report the situation immediately to the relevant law enforcement agencies and Binance Support team.
Learn how to spot and avoid money transfer scams in crypto in a new article in our Know the Scams series.
Money transfer scams involve criminals trying to trick their victims into sending money under false pretenses. These types of scams are typically encountered in two types of scenarios:
Peer-to-Peer (P2P) trading. In peer-to-peer (P2P) marketplaces, buyers and sellers can interact directly with each other to negotiate prices, payment methods, and the amount of crypto to be exchanged. While P2P crypto trading offers more control over the process than any other trading method, it does come with its own risks, such as scammers trying to steal your money.
Transactions regarding goods or services. Scammers target merchants with fake emails claiming delays or demanding a “deposit fee” to complete the transaction.
In this article, we'll talk about how money transfer scams usually happen, take a look at some real-life examples, and explain how you, as a user, can detect and prevent such scams.
How Do Money Transfer Scams Work?
finding the target
Scammers often find their victims on social media or cryptocurrency platforms. They can offer a price well above the market rate to a user trying to sell their crypto. Another possibility is that they can identify sellers who accept payment in exchange for products or services.
gain confidence
Scammers use a variety of tactics to gain the victim's trust, such as creating false documents showing that payment has been made or being overly interested in purchasing a seller's products or services.
Persuading to take action
In P2P trading scams, scammers often pressure their targets to release crypto as soon as possible. They also support this claim with numerous screenshots or documentation of the so-called “bank transfer.” Often, the scammer initiates a bank transfer and cancels the transfer as soon as they receive the crypto from the P2P seller.
If the transaction involves products or services, the scammer provides their victims with so-called “proof” of the transfer and then sends fake emails claiming that the transfer will be delayed. The scammer then asks the victim to transfer back the “excess cryptocurrency” or pay a “transfer fee,” promising that the pending transfer will be completed shortly.
final stage
The victim releases their cryptocurrency, but realizes that the screenshots or documents are fake or the fraudster canceled the bank transfer.
In the scenario involving payments for goods and services, fraudsters disappear after receiving the "refund" or "transfer fee". By the time the victim realizes that the screenshots, documents and emails he received are fake, it will be too late.
Two Examples of Fraud
Example 1: Buying and selling crypto
A P2P crypto user, whom we will call Mark, receives an order from a potential “buyer.” The "buyer" then forges a bank transfer slip, pressuring Mark to release the cryptocurrencies immediately before receiving confirmation from the bank that the money has been received. Mark does as he is told, but then finds that the bank transfer has been cancelled. Mark is left with nothing since he has already sent the cryptos to the fraudster.
Example 2: Purchasing art
An artist, whom we will call James, is approached by a collector interested in his work. The two reach an agreement and the other party claims to have transferred 700 USD in exchange for a painting. The buyer convinces James that payment is pending due to an "account update."
The scammer asks James to send back $200, claiming he needs the money while his $700 is locked in a pending transfer. James agrees, believing he will receive the funds once the "account upgrade" is complete. Ultimately, James realizes that all of the "collector's" claims are fake and that the scammer will not return his $200.
Tips to Protect Yourself from Money Transfer Scams
Check your account
Always ensure that the correct amount of funds have been successfully transferred to your account before releasing crypto in a P2P transaction. Scammers often cancel the transfer after sending the screenshot.
Be wary of fake screenshots, documents or emails
Scammers often use fake screenshots, documents and emails to trick you. Carefully verify whether the proofs are legitimate before releasing your cryptos.
Use a reliable platform
Make sure the P2P platform you use has a system to manage transactions, hold funds in escrow, and support users facing difficulties. Binance P2P has strong security measures to protect users against fraud and fraud, including stringent know-your-customer (KYC) checks and an escrow service.
Verify the other party
P2P platforms and standard e-commerce sites often show reviews and ratings of the person or institution you are trading with. Be careful if the user's profile has no reviews or a very high number of full-rated reviews. If you are a P2P crypto user, Binance P2P has a wide selection of “verified merchants” that have been carefully vetted by us. You can easily recognize these sellers by the yellow tick next to their username.
For more information on staying safe when trading P2P, you can read Binance Academy's How to Stay Safe When Trading Peer-to-Peer (P2P).
If You Have Been a Victim of a Money Transfer Crypto Scam
If you have been the victim of a scam, take immediate action to protect your finances. Freeze your bank and financial accounts and change the passwords of all your accounts, including email and social media.
Report the incident to the police and share all necessary information. Share any information you collect about all your interactions with scammers, including evidence such as payment documents sent to you. Binance works closely with law enforcement agencies and through our cooperation, breaches are detected and funds seized. While it's unlikely you'll save your money, it's often your only option.
If your Binance account has been compromised, deactivate your account and follow the steps outlined in the How to Report Fraud Cases at Binance Support guide. If you suspect that the counterparty you are trading with on Binance P2P is a scammer, contact our customer service immediately.
Be wary of "rescue services". While some of them genuinely aim to help, many make false promises or demand payment up front. Don't get scammed a second time.
We encourage all users, new and old, to read the other installments of our anti-scam series to better protect themselves against common crypto scams.