Because you are dealing with strangers when trading P2P, you should always be vigilant and keep in mind the possibility that your counterparty is not acting in good faith. Some common scams that exploit peer-to-peer transactions include identity fraud and cashback fraud.
Below you will find descriptions of common criminal schemes and tips on how not to become a victim.
Fake Proof of Payment Scams
When transacting P2P online, it’s extremely important to closely check all payment-related information that your counterparty shares with you. Scammers can manipulate screenshots and other evidence to claim that they have upheld their part of the deal and to pressure you into completing yours. If you comply without confirming that you have indeed received the money allegedly sent to you first, you put yourself at the risk of losing your digital assets with little chance of recovering them.
How to avoid it
Always make sure to check your bank account or wallet to confirm that you have indeed received the money that’s supposed to come your way from the P2P transaction.
Fake SMS Scams
A version of fake proof of payment scam is fake SMS scam, whereby criminals forge a text message that appears to notify the victim that they have received funds to their account or wallet. Sophisticated scammers can send you an SMS message that looks identical to the notifications sent by bank or e-wallet apps.
Here are some examples:
How to avoid it
Always make sure to check your bank account or wallet to confirm that you have indeed received the money that’s supposed to come your way from the P2P transaction. Don’t simply trust the message – log in to your bank or wallet account and check firsthand whether the funds are there and available to you.
Chargeback Scams
Sometimes, a scammer can attempt to take advantage of the chargeback feature available for some payment methods to retract the payment they have made to their P2P counterparty. Notably, in many such cases, they seek to process such payments via a third-party account.
Furthermore, if the person on the opposite side of a P2P transaction is attempting to pay you via a check deposit, they are most likely intending to defraud you. When using a check payment, requesting chargeback is extremely easy. If your counterparty insists on paying you via check, do not release the funds and appeal the order immediately.
How to avoid it
Always make sure to only accept payment from the buyer whose details match their verified name on Binance. Do not accept payments from third-party accounts, if it happens, raise an appeal and refund the payment back to the sending account.
Man-in-the-Middle Scam
In man-in-the-middle scam scenarios, malicious actors usually target reputable P2P traders who make fast transfers and accept third-party payments. A scammer will find a victim via social networking platforms, such as WhatsApp, Telegram, Instagram, or Facebook, and pretend to be that reputable P2P buyer looking to buy crypto.
Along with a link to a P2P ad, the scammer will send the victim their bank account details on the social networking platform to let them know they'll be making a payment via this account. The scammer will then ask the victim to confirm that they've received the account details by having them copy these details over to the P2P platform’s chat.
What the victim doesn't realize is that the scammer has sent them an ad from an unrelated buyer, whom the scammer set up to be part of the scam. The victim then sends their crypto to the buyer, who unknowingly sends money to the scammer’s account that they believe belongs to the victim (because the victim has previously shared the details of this account in the P2P chat).
At this point, the scammer disappears with the money. The victim, realizing this, will try to reverse the transaction by opening an appeal. However, there isn't much customer service can do in this case since all critical communication took place outside of the Binance P2P platform, and the buyer sent their funds to a third-party account.
How to avoid it
Don't respond to trading requests on any social networking platform, and limit your communication with your counterparty to the Binance P2P platform ahead of and during a transaction. More importantly, if a buyer asks if they can make payment via a third-party transfer, remind them transfers made from someone else's account violate P2P transaction policies.
Triangle Scam
A triangle scam involves two buyers belonging to the same criminal group taking two orders from the same seller almost simultaneously. For example, Buyer A takes an order for 5000 UAH worth of crypto (order A), while Buyer B takes an order for the equivalent of 6000 UAH (order B).
Buyer B then transfers 5000 UAH to the seller, at the same time Buyer A marks the order A as paid. The seller releases crypto to Buyer A, thus completing order A for 5000 UAH. Buyer B sends another 1000 UAH to the seller, provides payment proof for 5000 UAH (which they got from Buyer A) plus 1000 UAH, and forces the seller to release digital assets under order B.
When the dust settles, it turns out that the seller has released 5000+6000 = 11,000 UAH worth of crypto but have been paid only 6000 UAH.
How to avoid it
Always make sure to check your bank account or wallet to confirm that you indeed have received all the money from all your pending P2P transactions. Be careful with the proof of payment the counterparties send to you and remember that the evidence can be reused
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