Beware of LocalBitcoins.com

[moreia]

I doubt it is that easy to just fraud your way through localbitcoins... someone would be able to tell between fraudulent ratings and real ones. I'm sure admins would also be able to monitor the ratings and how quick they get them after they open an account

[u9y42]

I doubt it is that easy to just fraud your way through localbitcoins... someone would be able to tell between fraudulent ratings and real ones. I'm sure admins would also be able to monitor the ratings and how quick they get them after they open an account

Well, the site does have a lot of users, so it's not exactly easy to monitor ratings just like that; some kind of automated system must certainly be in place. And how quickly you gain feedback isn't exactly a very good indicator for such a system, as you're likely going to get a lot of false positives, and miss out on the more cautious scammers.

On the other hand, if the only ratings a user has are from other relatively new accounts and for low amounts of btc, then perhaps you should be cautious when dealing with them. And in the case the feedback is coming from older, more established accounts, then I assume an automated system could catch them, by linking them to all the accounts used for scamming.

[BiTJack]

Wow thanks for the heads up man. I have used that exchange couple of times but i didn't know the buyer can cancel the trade and seller can't thats not good. I'll sure think again dealing in future there.

Where did u get this part that says a Seller cant cancel a trade ?

Use it sometime you will know. 

[ShakyhandsBTCer]

Wow thanks for the heads up man. I have used that exchange couple of times but i didn't know the buyer can cancel the trade and seller can't thats not good. I'll sure think again dealing in future there.

Where did u get this part that says a Seller cant cancel a trade ?

If the seller has set it up for full escrow then the seller cannot cancel the trade.  This feature is used when the people are not going to meet face to face (bank transfers, WU, PayPal, etc.).  I always meet face to face for cash so I do not use the full escrow service.  Instead I simply fund the transaction to show that I have the BTC ready for the buyer, we meet, they give me the cash, I count it, then I release the BTC to them.  Simple.  If they don't show I just cancel the transaction and my BTC are released back to me.

If you use the site correctly there are no issues.  It is a great site.  Use it all the time.  Never had any issues at all.

When you do this then the buyer is the one taking the risk as if the seller was going to scam then he could just take the cash, put it in his pocket and walk away.

[bigasic]

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

[BurtW]

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

All untrue.

[DannyElfman]

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

All untrue.

The government has charged multiple people with violating money laundering charges when they were trading on local bitcoin for large amounts and received high premiums

[BurtW]

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

All untrue.

The government has charged multiple people with violating money laundering charges when they were trading on local bitcoin for large amounts and received high premiums

Do you have any proof for this?  Links?

The only stories I have ever read involved police arresting someone for selling bitcoins after the undercover officers told the seller many times that they were going to use the BTC for illegal purposes.  I have never seen a story of anyone being charged for money laundering directly.

So unless you have credible links you are just repeating rumors and spreading FUD.

[Gimmelfarb]

i just don't like the interface, and stay away from online transfers anyway. i do use LBC for craigslist-type deals, for cash only. i don't like the idea of using them for escrow, and i certainly don't want to pay them for it.

[ShakyhandsBTCer]

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

All untrue.

The government has charged multiple people with violating money laundering charges when they were trading on local bitcoin for large amounts and received high premiums

Do you have any proof for this?  Links?

The only stories I have ever read involved police arresting someone for selling bitcoins after the undercover officers told the seller many times that they were going to use the BTC for illegal purposes.  I have never seen a story of anyone being charged for money laundering directly.

So unless you have credible links you are just repeating rumors and spreading FUD.

The only issue in these cases is if the seller was following AML rules, including having a money transmitter license. If he undercover police told them they were going to use the BTC for illegal purposes and the seller followed all of the AML rules then there would be no case.

[InwardContour]

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

All untrue.

The government has charged multiple people with violating money laundering charges when they were trading on local bitcoin for large amounts and received high premiums

Do you have any proof for this?  Links?

The only stories I have ever read involved police arresting someone for selling bitcoins after the undercover officers told the seller many times that they were going to use the BTC for illegal purposes.  I have never seen a story of anyone being charged for money laundering directly.

So unless you have credible links you are just repeating rumors and spreading FUD.

I think these cases are one of the same. I think the seller was charging something like a 30% markup on trades. When the police traded with the seller they claimed to be using the BTC illegally, and when the seller did not report this they charged him with a separate crime. IMO this is very bad public policy but still a reality.

[CEG5952]

I wouldn't use them for too high of volume. After seeing some of those stories, I definitely figured it best not to be a liquidity provider there. And I prefer to deal in cash only -- P2P and not through the site directly.

[InwardContour]

I wouldn't use them for too high of volume. After seeing some of those stories, I definitely figured it best not to be a liquidity provider there. And I prefer to deal in cash only -- P2P and not through the site directly.

Local bitcoins does allow you to meet to do face to face transactions that are not part of their escrow service.

[CEG5952]

I wouldn't use them for too high of volume. After seeing some of those stories, I definitely figured it best not to be a liquidity provider there. And I prefer to deal in cash only -- P2P and not through the site directly.

Local bitcoins does allow you to meet to do face to face transactions that are not part of their escrow service.

Sure, I know. The only way I use LBC is for in-person cash transactions. However, to be a liquidity provider and be able to charge markup over/under the exchange price, you need to have a good reputation. That means using LBC escrow (paying fees) and garnering confirmed feedback.

[davellolzz]

Will its not surprising that scamming people using BTC is much easier than using Paypal.
Coz the BTC system is something new to all.
Of course naturally a new system has  many bugs and problems that can be exploited by thieves online.

Just like when you send a btc to the other wallet.
There is no system that can protect the sender/buyer from scammers.
Unlike in paypal that even if the scammer already get your money. You still have  chance to get it back by filing a dispute.
Problem from this dispute system of paypal is that it is also abused by some BUYERS/SCAMMERS who want to get free stuffs. >.<

So there is no PAYMENT METHOD that is safe FOR REAL.

[DannyElfman]

I wouldn't use them for too high of volume. After seeing some of those stories, I definitely figured it best not to be a liquidity provider there. And I prefer to deal in cash only -- P2P and not through the site directly.

Local bitcoins does allow you to meet to do face to face transactions that are not part of their escrow service.

Sure, I know. The only way I use LBC is for in-person cash transactions. However, to be a liquidity provider and be able to charge markup over/under the exchange price, you need to have a good reputation. That means using LBC escrow (paying fees) and garnering confirmed feedback.

There have been several threads on here about attempted robberies at face-to-face LBC transactions when the buyer has tried to steal the seller's phone so the release code could be entered.

[BurtW]

There have been several threads on here about attempted robberies at face-to-face LBC transactions when the buyer has tried to steal the seller's phone so the release code could be entered.

I have done hundreds of transactions with not even one single issue (except a couple of no-shows).

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

All untrue.

The government has charged multiple people with violating money laundering charges when they were trading on local bitcoin for large amounts and received high premiums

Did you ever find any proof for your claim?  Any links?

The only stories I have ever read involved police arresting someone for selling bitcoins after the undercover officers told the seller many times that they were going to use the BTC for illegal purposes.  I have never seen a story of anyone being charged for money laundering directly.

So unless you have credible links you are just repeating rumors and spreading FUD.

[Harley997]

There have been several threads on here about attempted robberies at face-to-face LBC transactions when the buyer has tried to steal the seller's phone so the release code could be entered.

I have done hundreds of transactions with not even one single issue (except a couple of no-shows).

I would argue that the risk of this happening is pretty small but it is still possible. The best way to manage this risk would be to simply meet in a public place and use common sense when dealing with strangers.

[CEG5952]

I wouldn't use them for too high of volume. After seeing some of those stories, I definitely figured it best not to be a liquidity provider there. And I prefer to deal in cash only -- P2P and not through the site directly.

Local bitcoins does allow you to meet to do face to face transactions that are not part of their escrow service.

Sure, I know. The only way I use LBC is for in-person cash transactions. However, to be a liquidity provider and be able to charge markup over/under the exchange price, you need to have a good reputation. That means using LBC escrow (paying fees) and garnering confirmed feedback.

There have been several threads on here about attempted robberies at face-to-face LBC transactions when the buyer has tried to steal the seller's phone so the release code could be entered.

I'm sure that's possible, but seems rare and unlikely. Meet in a public place, and preferably deal with people with some level of positive feedback. But mostly, just meet in a public place. Starbucks has cameras -- that's sort of a deterrent...

[ShakyhandsBTCer]

I wouldn't use them for too high of volume. After seeing some of those stories, I definitely figured it best not to be a liquidity provider there. And I prefer to deal in cash only -- P2P and not through the site directly.

Local bitcoins does allow you to meet to do face to face transactions that are not part of their escrow service.

Sure, I know. The only way I use LBC is for in-person cash transactions. However, to be a liquidity provider and be able to charge markup over/under the exchange price, you need to have a good reputation. That means using LBC escrow (paying fees) and garnering confirmed feedback.

There have been several threads on here about attempted robberies at face-to-face LBC transactions when the buyer has tried to steal the seller's phone so the release code could be entered.

I'm sure that's possible, but seems rare and unlikely. Meet in a public place, and preferably deal with people with some level of positive feedback. But mostly, just meet in a public place. Starbucks has cameras -- that's sort of a deterrent...

That is probably the best advice to give when dealing with large amounts of cash when you do not wish to use the banking system.