What are best practices when trading P2P?

[pawanjain]

Yeah I have heard a few months back that someone's bank account got freezed due to a crypto related bank transfer.
I have always imagined what if I get into such a situation and had myself prepared for that already.
What I did was to create a bank account just for crypto related transfers and had my main account away from such transfers.
When I receive the amount from someone I transfer it immediately to my main account.
So even if my account gets freezed it will only be my secondary account that gets freezed while my main account remains intact.
So far things are going smooth and I have never got my account freezed 

Still officials can find those bank account belongs to who and if it is owned by the same individual then you are still under the risk of getting frozen and after the Aadhar implementation the tracking becomes more easier to them.

That's exactly where you are wrong. Yes, officials do have the ability to track an individual but they don't track just any individual for crypto transactions but if the person is involved with some kind of illicit activities such as selling drugs, money laundering, scamming, fraud only then they track the person and freeze all his accounts.
The other thing where banks freeze the accounts is when some particular bank is against crypto only then they freeze the account and in such case only the particular bank account gets freezed. Not the other bank accounts because they are not under the same bank. This is why it is important for us to open bank accounts in DIFFERENT banks.

[akram143]

Yeah I have heard a few months back that someone's bank account got freezed due to a crypto related bank transfer.
I have always imagined what if I get into such a situation and had myself prepared for that already.
What I did was to create a bank account just for crypto related transfers and had my main account away from such transfers.
When I receive the amount from someone I transfer it immediately to my main account.
So even if my account gets freezed it will only be my secondary account that gets freezed while my main account remains intact.
So far things are going smooth and I have never got my account freezed 

Still officials can find those bank account belongs to who and if it is owned by the same individual then you are still under the risk of getting frozen and after the Aadhar implementation the tracking becomes more easier to them.

That's exactly where you are wrong. Yes, officials do have the ability to track an individual but they don't track just any individual for crypto transactions but if the person is involved with some kind of illicit activities such as selling drugs, money laundering, scamming, fraud only then they track the person and freeze all his accounts.
The other thing where banks freeze the accounts is when some particular bank is against crypto only then they freeze the account and in such case only the particular bank account gets freezed. Not the other bank accounts because they are not under the same bank. This is why it is important for us to open bank accounts in DIFFERENT banks.

Banks simply don't freeze the account just because it involved in the crypto related transaction since there is no restrictions now in India against crypto currencies.So you need to assume that you account connected to somewhat illicit activities as you mentioned above with or without knowledge of you.

Example:

Someone hacked a bank account,
Create an account on localbitcoin with fake ID and mobile number (because its easier to get in India)
Buy bitcoin by responding to different ads on LBC
Now hacker still being anonymous but laundered the hacked money into bitcoin
Finally the trader of LBC will be accused of hacking that bank account.

Is it clear now, why people's bank accounts are locked?

[pawanjain]

Yeah I have heard a few months back that someone's bank account got freezed due to a crypto related bank transfer.
I have always imagined what if I get into such a situation and had myself prepared for that already.
What I did was to create a bank account just for crypto related transfers and had my main account away from such transfers.
When I receive the amount from someone I transfer it immediately to my main account.
So even if my account gets freezed it will only be my secondary account that gets freezed while my main account remains intact.
So far things are going smooth and I have never got my account freezed 

Still officials can find those bank account belongs to who and if it is owned by the same individual then you are still under the risk of getting frozen and after the Aadhar implementation the tracking becomes more easier to them.

That's exactly where you are wrong. Yes, officials do have the ability to track an individual but they don't track just any individual for crypto transactions but if the person is involved with some kind of illicit activities such as selling drugs, money laundering, scamming, fraud only then they track the person and freeze all his accounts.
The other thing where banks freeze the accounts is when some particular bank is against crypto only then they freeze the account and in such case only the particular bank account gets freezed. Not the other bank accounts because they are not under the same bank. This is why it is important for us to open bank accounts in DIFFERENT banks.

Banks simply don't freeze the account just because it involved in the crypto related transaction since there is no restrictions now in India against crypto currencies.So you need to assume that you account connected to somewhat illicit activities as you mentioned above with or without knowledge of you.

Example:

Someone hacked a bank account,
Create an account on localbitcoin with fake ID and mobile number (because its easier to get in India)
Buy bitcoin by responding to different ads on LBC
Now hacker still being anonymous but laundered the hacked money into bitcoin
Finally the trader of LBC will be accused of hacking that bank account.

Is it clear now, why people's bank accounts are locked?

Bro that is exactly what I mentioned. Why are you explaining the same thing to me ?

[avikz]

Banks simply don't freeze the account just because it involved in the crypto related transaction since there is no restrictions now in India against crypto currencies.So you need to assume that you account connected to somewhat illicit activities as you mentioned above with or without knowledge of you.

Example:

Someone hacked a bank account,
Create an account on localbitcoin with fake ID and mobile number (because its easier to get in India)
Buy bitcoin by responding to different ads on LBC
Now hacker still being anonymous but laundered the hacked money into bitcoin
Finally the trader of LBC will be accused of hacking that bank account.

Is it clear now, why people's bank accounts are locked?

Probably yes! But since there is no way to know whether a trader is linked with such illegal activities, we are taking a huge risk! I think if a company start issuing a debit card in India, that will be a big plus as well as safe. At least we won't risk loosing out bank account and associated regulatory hustles that comes afterwards. Indian legal system is very weak and common people often don't get justice from the system.

Do anyone of you know any company that issues crypto debit cards to the Indians?

[Melloiga]

Transferring money from one bank account to another might not be that safe.

Say, you traded with someone and they transferred the money into your bank account by hacking into someone else's account. That person who's money got stolen complains and they freeze the account the money got transferred to.

AND they might freeze the account/s which are linked to same Aadhar/Pan.

But the idea behind the thread was not how to prevent your money from getting stuck in a frozen account but to find out ways to avoid receiving stolen money into your account and there by preventing the freeze altogether.

So that we can make P2P more safe.

[allahabadi]

Just for one thing...

Can people stop behaving as if crypto exclusively means shady illegal dealings only?

I think one needs to be careful, but not worry too much.

[akram143]

~snip
Bro that is exactly what I mentioned. Why are you explaining the same thing to me ?

I am not repeating, I just want to say that we can never know the trader's source of money is from legal or illegal activities, so we can't be safe even if we move our funds to another accounts once the trade completed.

Probably yes! But since there is no way to know whether a trader is linked with such illegal activities, we are taking a huge risk! I think if a company start issuing a debit card in India, that will be a big plus as well as safe. At least we won't risk loosing out bank account and associated regulatory hustles that comes afterwards. Indian legal system is very weak and common people often don't get justice from the system.

Do anyone of you know any company that issues crypto debit cards to the Indians?

AFAIK, RBI don't want any of the companies to offer such service to Indian so we couldn't have any until the government regulate the cryptos.

[dre1982]

I should suggest to use Localbitcoin. I tried that a couple of times and it went very smooth anytime. Just read some reviews of the seller before do the actual trade.

[somathnath]

I think paxful and wazirx is the most trust p2p Indian user can use more trade volume in the country

[Melloiga]

I should suggest to use Localbitcoin. I tried that a couple of times and it went very smooth anytime. Just read some reviews of the seller before do the actual trade.

The guy I mentioned in the original post. The one who got his account frozen did happen to use Localbitcoins and according to him all the people he traded with had reputed accounts.

So, I don't know if 'reviews' really tell if the account changed hands. It is possible that someone bought/stole a reputed account to do illicit activities in that guy's case.

But thanks for your suggestion. I suppose reading reviews does help a little to see if the trader's been inactive for a while and that could tell if it is the original owner or not. You can always ask for his ID to check if he's the original owner of the account or not. You'd have to define these terms prior to making the trade though.

[libert19]

I will share my story.

Back when rbi banned banks from dealing with crypto individuals the only choice was p2p exchanges, and crypto was my only source of income so I had to use them.

I used instashift, i had done several trades there, most of them had went smooth, some went to dispute but resolved shortly after.

Now this trade, I sold about 10k worth of crypto, received money, clicked 'I received money' on platform and done.

Now, couple days later when I check my bank account, the money was put on lien. I checked in with bank (dbs), they said we can't help you as we got order from sbi (the ac I received money from was sbi), for anything to do with your case go to some sbi branch in Mumbai, now I forgot the exact details.

I didn't proceed as I felt like it was BTC trade so it would be like beating a dead horse.

I was certainly scammed though, as when I confirmed 'I received money' option, BTC would have been released to other party and he would have withdrawn soon after.

Question is, was the other guy scammer himself? Or he used someone else's account to transfer money to me and when the genuine guy realized he placed a chargeback?

To add, 'scammer' guy had his number switched off when I tried to call and from truecaller I found that the guy was from WB.


Since supreme court has overruled rbi ban. Just use regular exchanges and avoid p2p.

[Mistafreeze]

Guys is there a way to stay anonymous and do p2p trading?
Most p2p exchange make it compulsory to do kyc after we have traded a certain amount. Is there any exchange that allow non kyc users also to do any amount of trading?

[ComposMentised]

1. Get to know people through bitcoin meetups.
2. Build friendship.
3. Build P2P community with these new friends. New people will always be added when at least one person knows them thoroughly.
Voila !!

[Mistafreeze]

The main reason is that when mostly people start p2p they don't have enough experience so they just truted on every person but it's wrong when you deal with anyone online check that persons information like where from that guy that's ip address and you must remain in contact with an expert guy.

Ips can be faked by using vpn. Always trade with person who has most positive feedback. Never release funds unless you got your crypto in your wallet.
If you are selling crypto, only release them when you get money to your bank or wallet.
For buying crypto, do them same. Don't trust screenshots as many scammers use photoshopped acreenshots

[amishmanish]

1. Get to know people through bitcoin meetups.
2. Build friendship.
3. Build P2P community with these new friends. New people will always be added when at least one person knows them thoroughly.
Voila !!

This is probably the best idea. if anyone would be open to having such a group in North India, please PM me and we can take it further. With the coming ban, it maybe the case that unnecessary investigations into bank accounts linked with crypto exchanges like WazirX, Binance etc will come under scrutiny.
If for nothing else, I'll be happy to have a real-life group that is positive about Bitcoin and its impact.

[Mistafreeze]

1. Get to know people through bitcoin meetups.
2. Build friendship.
3. Build P2P community with these new friends. New people will always be added when at least one person knows them thoroughly.
Voila !!

This is probably the best idea. if anyone would be open to having such a group in North India, please PM me and we can take it further. With the coming ban, it maybe the case that unnecessary investigations into bank accounts linked with crypto exchanges like WazirX, Binance etc will come under scrutiny.
If for nothing else, I'll be happy to have a real-life group that is positive about Bitcoin and its impact.

But don't you think if btc is banned and we still do p2p trade, we may get into trouble?
Someone from group may report or even economic intelligence teams get to know about it and they will crack down on all group members.
I don't want to be the part of anything that is not approved by law.

[amishmanish]

1. Get to know people through bitcoin meetups.
2. Build friendship.
3. Build P2P community with these new friends. New people will always be added when at least one person knows them thoroughly.
Voila !!

This is probably the best idea. if anyone would be open to having such a group in North India, please PM me and we can take it further. With the coming ban, it maybe the case that unnecessary investigations into bank accounts linked with crypto exchanges like WazirX, Binance etc will come under scrutiny.
If for nothing else, I'll be happy to have a real-life group that is positive about Bitcoin and its impact.

But don't you think if btc is banned and we still do p2p trade, we may get into trouble?
Someone from group may report or even economic intelligence teams get to know about it and they will crack down on all group members.

It is difficult to say anything right now as to what extent the Indian babus and netas will go in their baseless fears. If they criminalize holding crypto then the fear is natural and there won't be much of a choice left. As of today, there is nothing illegal in p2p trading or forming such a group as long as you are paying your taxes on returns.

I don't want to be the part of anything that is not approved by law.

Even today, crypto is not "approved by the law". You choose it out of your own volition because its basically just software and a bit of finance.

[teosanru]

1. Get to know people through bitcoin meetups.
2. Build friendship.
3. Build P2P community with these new friends. New people will always be added when at least one person knows them thoroughly.
Voila !!

This is probably the best idea. if anyone would be open to having such a group in North India, please PM me and we can take it further. With the coming ban, it maybe the case that unnecessary investigations into bank accounts linked with crypto exchanges like WazirX, Binance etc will come under scrutiny.
If for nothing else, I'll be happy to have a real-life group that is positive about Bitcoin and its impact.

But don't you think if btc is banned and we still do p2p trade, we may get into trouble?
Someone from group may report or even economic intelligence teams get to know about it and they will crack down on all group members.

It is difficult to say anything right now as to what extent the Indian babus and netas will go in their baseless fears. If they criminalize holding crypto then the fear is natural and there won't be much of a choice left. As of today, there is nothing illegal in p2p trading or forming such a group as long as you are paying your taxes on returns.

I don't want to be the part of anything that is not approved by law.

Even today, crypto is not "approved by the law". You choose it out of your own volition because its basically just software and a bit of finance.

I don't think these Babus and Netas would ban it now. From last few days I have felt that thousands of new investors have actually entered crypto space. Every youngster who is slightly into technology is buying Bitcoins or Altcoins. I would be amused if these Babus and Netas don't have a huge holding in their name. Currently nothing is actually illegal if we see it this way.

[sickingajay]

been trading p2p for the past 3 years now
There could be the reason why the account was seized as half of you have already mentioned the most possible reasons already.
But the best practise for p2p is
Stick to 2-3 traders who have a high rep and always trade with the same people.