Bitcoin Forum

Stop buying BTC from random people, we got centralised and decentralized exchanges for this, the reason why I'm saying this is because someone bought BTC from a scammer in my country and the scammer was apprehended somehow and the BTC he sold to this person was scammed from one Jonathan in the U.S, the buyer was arrested as well thinking they are in this together, it takes weeks before more proves where gathered to prove that the buyer don't know anything about it.

Instead direct your friends to binance or other exchanges to buy coins cos you don't know what your friends are doing behind the close door.

Well, this is risky as hell to get yourself in trouble but when you don’t have a lot of ways, what can you do? Maybe the buyer didn’t want to go through the hassle it had to take for depositing money into the exchange and avoid withdrawal fee. Or what about the buyer wanted to buy BTC without any info shared with CEX? There can be a lot of alternatives why anyone would avoid buying BTC from exchanges.
This is exactly the reason we should be more cautious; ensure more privacy. You have coin mixer for that to leave trace. Wondering why didn’t the scammer do that LOL.

One good reason why people choose not to buy crypto from centralised exchanges is to ensure their privacy. Centralised exchanges require kyc for p2p traders. The buyer received the Bitcoin in a CEX I think that's why the police got to him

Even if this is the case and everything is how you say it, theoretically (but more difficult due to the KYC?) the same thing can happen if the scammer uses an exchange to sell them. Authorities will accuse the exchange because someone sold through them stolen BTC. Or not? :-\

If you have a way to buy bitcoin legally and proof of payment using one of the central platforms in your country, then the best option is.
Bitcoin and other cryptocurrencies are easy to track so you may end up with a problem buying from random people although using a good mixing service will be enough to solve such a problem.

When I talk about the currency mixing service, I do not mean services like coinjoin because it may lead you to more problems.

It is a good option to be able to buy bitcoin from centralized or decentralized exchanges, specially if we want to sell/buy to random people.

However, the most amazing about bitcoin protocol is that we are allowed to sell p2p, without any intermediary. Ofc it is dangerous to sell to a random person, because he may be a scammer. But we can sell to people we know.

Being able to sell to p2p to people we know, or we just met, is amazing. There are more honest than dishonest people in this world, and being able to decide to who we can sell/buy is amazing. We cannot do that with tradicional financial assets, like stocks. We have to use exchanges.

I think a random person in the internet is more suspicious and more likely to be a scammer than someone that you just met in your real life, as there a lot of scammers hiding behind the computer.

Who even buys Bitcoin from a random person they do not know and cannot get hold of, you can only do that when you're transacting on an exchange, if you're not going through an exchange, you'll have to somewhat know the person or must have met them on a platform, like bitcointalk for example and such person must have an untainted reputation before you can go on and buy Bitcoin from him/her.

The thing is, if you do not have a trusted buyer or seller outside an exchange, it's much better you carry out your transaction on an exchange, but it's going to come at the price of your privacy.

You could somehow put some source(s) of the news if it's available on your country's media outlet's website, coz the way of how the scam happens is confusing to us who just read your statement.

While there are lots of pros of buying/selling to p2p but the cons are still there since the money/fiat used to buy can be reverse depends on what method they use but the bitcoin/crypto sent cannot be reverse. That's why its more safety to buy/sell to the one you knew.

But buying/selling on cex, has more pros too in terms of ease of use and convenience, but in return you need to give you personal information which is kinda cons too.

There are those that are fine to do real life and meet up trades. There's no way to stop that.

As for those, they have reasons for it like they are not really on the technology and they just want someone to help them purchase who actually owns it.

But true to that when someone wants to buy, there are the exchanges.

I'm afraid there is actually no difference at all. The scammer could have sent the BTC to Binance or other exchanges to sell. BTC in Binance and other centralized and decentralized exchanges are not guaranteed to be clean. There is no way we could tell whether the BTC we are buying from centralized and decentralized exchanges are stolen or not unless we are buying virgin coins.

Ideally, transactions should be P2P to avoid third parties.

Scammers are everywhere, you need to be cautious before and do the right thing as per the law in your country. Ideally anyone who is interested in buying Bitcoin should buy it from a reputable exchange but if your friend is selling you Bitcoin you would always believe in your friend. In my opinion that individual who bought the Bitcoin is not a fault. It is just a bad luck that he bought it from a scammer.

Peer to peer marketplaces are third parties that provide Escrow services for safety of both buyers and sellers.

• Most of P2P marketplaces are centralized, with KYC requirements.
• A true decentralized P2P marketplace I know of is bisq.network (https://bisq.network/). Disadvantage is trading volume (https://coinmarketcap.com/exchanges/bisq/) is low.
• Why KYC is extremely dangerous – and useless (https://bitcointalk.org/index.php?topic=5221497.0). Choose either privacy or convenience with trading volume.

Thats a nice tip. But I doubt everyone will just buy bitcoin randomly, thats should be their risk as well. Also if I were the buyer, I am gonna check first the seller legitimacy and if he didnt have any transaction worth suspicious.  You are right, that there are centralized exchanges. But sometime buyers protect also themselves thats why choosing peer to peer method, however its also a risk if they encountered similar case like you shared.

This is not a good excuse for the seller, how much can an exchange charge for withdrawal? Roughly 1$ to 5$ for converting to Fiat, I think the seller knew that he can be caught if he used exchange because of KYC verification, he intentionally sell it locally

This is a good advice, I have people around me that always want to use my binance account to sell coins but I don't allow it because they are into frauds as well and I don't want my image to get tarnished, binance exchange have my KYC and also BVN, if anything goes wrong I will be hold responsible

Every time I make a deposit, I trade at a merchant that I often trade, so the risk will be smaller, and there has been no bad money in about a year or two. It is recommended to choose a familiar merchant.

You are right that Dex are the perfect place to trade coins without leaving behind any trace but not all fraudsters knew this, if one has nothing to hide anyways there isn't any reason to hide how you transact crypto

Buying through Dex platforms is just like buying from anyone but in a more secured way, both the buyer and the seller made a big mistake there if they both know their way to crypto exchanges why not just sell on exchange instead? I haven't heard about getting tracked through Dex exchange it's always centralised exchanges

Probably the OP means that the bought bitcoins were considered, as they call it, "dirty"
Today, there is a lot of information about what "dirty bitcoins" are and how not to get caught buying such coins. Probably already from the name, it is clear that they include bitcoins, which were involved in any fraudulent activities, and all those who have anything to do with them are taken into account by the investigation services.
As for the exchanges, if suspected, they have the right to freeze funds. The verification is well done by Chainalysis, which has the Chainalysis KYT product. With its help, the past of cryptocurrencies is revealed. But it is unfair to blame a "bona fide purchaser" who has nothing to do with criminal activity.

Peer to peer exchange is best way to sell or buy Bitcoin. Exchange can be done there with no issues or stories. Selling to a buyer which you don't know or trace if anything happens is risky

There are virtually many exchanges we can buy our bitcoin with problem which can help to avert the later means of being scammed. Although we don't need to contradict the aspect of but Bitcoin from street or unknown persons but one needs to be careful when transacting business with some you don't know cause what you are buying might be a stolen coin and later end up being arrest for what we know nothing about.

Exactly. Either we buy BTC from an exchange or not, we can't really know from where are actually coming. Even if authorities can trace stolen BTC, they are not as fast as the process is not fast and that gives time to any scammer to move.


And again, we will don't know the origin of the coins. :-\

Your story are lack of information, we don't know what P2P marketplace they use (direct P2P without platform, centralized P2P, or decentralized P2P). If they use direct P2P or DEX P2P both of them should be safe as long as they didn't go through local/centralized exchange asking their KYC, since the police only know the public address but they don't have any idea which person using that address.

This is what you write on your topic before "the person didn't know who's he trade", how can you know you trade with good or bad person in P2P or DEX? it's impossible since you picking random person.

If you trading on P2P you're more high risk to get dirty Bitcoin, while on CEX they've AML policy and own algorithm to red flag a suspicious address with high amount money and froze the coins + asking KYC. Though we can't really sure how good is the system, but at least the potential you get the dirty Bitcoin will be lesser.

The best solution of this problem is using Bitcoin mixer and using DEX.

The problem here is not from where you should buy cryptos but that most law enforcement agencies don't understand how the blockchain technology works. Just because someone's address can be linked to a thief's address, doesn't necessary mean he is involved with him.
But to be safe and avoid getting in such troubles without sacrificing your privacy, you should always use mixers or addresses that can't be linked to your real identity when dealing with a person you don't know. Also, document everything that can later serve you as a proof that you really bought those coins such as chat logs, bank transfers...

The thing is that many people are against giving out KYC details to these centralized exchanges and then end up in P2P trades.
P2P trades are good only if the buyer/seller is a genuine person. Otherwise it becomes a nightmare for the person.
People have to understand that they should either give out their KYC details to exchanges to trade BTC to fiat without any hassle or have some person for P2P who is known to them.
Otherwise the risk of getting scammed or getting the cops to your door is higher.

Besides that if cops get to your doors you will eventually have to give out your KYC details. So why not give them to exchanges instead and do the trade hassle free.

What's so wrong with KYC verification? I believe that only criminal minded people would want to hide their transactions online, it's why I feel like DeX exchanges are criminals haven, if you have nothing to hide you won't mind using any exchange available KYC or no KYC, I use binance exchange and I verified my KYC as I don't see any reason not to because I work for every penny I made

It's not really about hiding transactions on the internet but your safety on the internet as well as in the real world.
Giving out KYC details means giving away your personal details as well as the place where you live.
I have seen that KYC details are available for sale on the dark web such as the case of leaked Ledge Nano data.
Most of the people who bought Ledger Nano hardware wallet were receiving threats because their personal details were leaked.
So giving away KYC details does concern some people.

Some people prefer to buy btc via P2P or random meetups for some reasons, maybe because they don't want to exposed their privacy on centralized exchanges. If you are for example a public figure and you want to own bitcoin but you don't want other people to know about it then the option is P2P, but I don't think if you mistakenly and you have no any idea that you bought btc came from fraud activities you are now liable for any crime, the only problem is you may questioned by authorities even if you are innocent.     

This was actually my issue when I checked out localbitcoins. Good thing that there are such ratings that can be seen there. I just don't trust that much those people that are asking for a bank deposit before they give you your Bitcoins. It's more sus, than those that you can meet up around your area.
Never did a p2p trade there. I did only one for my friend at the least and at the best.

Yes, if you're buying from another person directly, there will always be a risk that you will receive some very directly tainted bitcoins, the risk may be very small, but it's there.

But with centralized exchange all the funds are pooled so the users won't have to deal with it, the authorities will contact the exchange. Unless the exchange is laundering money and will itself get shut down, like it happened to BTC-E.

Gone are the days when people could easily register on Binance and trade and withdraw without a KYC. So, there is stress going through the KYC process to even start with, besides the cut throat withdrawal fee on Binance. I can't even remember the last time I withdrew BTC from Binance. Another thing could be that people want it fast and sharp with peer2peer instead of going through the exchange.

I understand your drift OP, nevertheless I think these things are totally things we may not have a complete control of. We can't really say what the person we're selling/buying from does for a living or how they got their traded cryptos. Even on exchanges, there's P2P and the criminal could've done transaction using a P2P too on Binance and it still would've been traced to your friend.

Thus I think it is foolish to buy BTC from different people. Because if you need to buy BTC, there are various good quality exchanges to buy from there. Because people can try to cheat you, but the chances of cheating from a large exchange such as Binance is less.

But there's still a chance, right? Your fanaticism to particular exchange must end immediately. No centralized exchange is completely secure now. There is a term "theft" which is justified under the pretext of complying with the law or based on unilateral policies, that is when your account is frozen while they can freely use your money which they keep in their centralized wallet.

That doesn't mean you have to stop using the exchange, at least you have to listen to the reasons people are avoiding it.

Binance is begining to lose its trust from the community, they have mess up their reputation as they allowed the government pressure them into enforcing KYC verification. It kind of seems like they're bringing out new verification procedures every now and then. Before all this, trading on binance was quiet an experience but they soon will be banning non verified individual from enjoining other features of the platform which will just suck.

This is a decentralized space and you can't help but encounter scammers every now and then. Try to protect yourself like documenting every transaction you do to have proof Incase it's needed to defend yourself. The fund if scammers shouldn't deprived you the satusfacyif a decentralized experience.

Non merchant aren't the only ones facing similar fears, as a P2P merchant myself I get sometimes scared by the clients I'm transacting with but I don't let that stop me from wanting to offer my exchange service, I just do proper documentation making sure I can proof I knew nothing Incase I'm been called to defend myself.

There is actually nothing wrong with KYC verification on centralized exchanges with good reputation per se, but many crypto users try their possible best to protect their privacy and their data, it's not about having the intentions of stealing or hiding anything, but just cause people value their personal data and wouldn't want a situation were it'll be sold on the dark market. There have been numerous incidents of crypto exchanges being hacked and users data exposed to dangerous people, this can put people in danger as their personal information is what's submitted to complete KYC verification.

Having said that, governments use centralized exchanges to track people, as the exchange holds the data of their users and the government has the power to request for it, this is another reason people shy away from centralized exchanges. There is absolutely nothing wrong with dex exchanges and it has nothing to do with 'criminals', it's just an avenue for crypto users to maintain a high level of privacy and security.

Don't blame Bitcoin for what someone does. Don't blame yourself for what someone else decides behind you.
You only give way, provide some knowledge, and at least you have given the right steps, awakening them to risk and the possibility of the benefits they get, but never promise something.
Here, we can know that however, we cannot control someone 24 hours. We can only tell and direct. And whatever they decide and do is their decision and they must bear the risk.

Likewise with Bitcoin. Someone can be very rich with Bitcoin. But, someone can also be very poor because of Bitcoin. Why is it very different? Of course, it will be different because they have different steps when deciding and doing it.

There's really a risk buying from random people but in the first place this is why Bitcoin was created for peer to peer transactions, times have changed now and it's not a good idea trading on random people, I will only recommend peer to peer between relatives and the people you know well but with random and strangers there's a big risk like you mentioned, you can save fees but you never what's going to happen next.