What are best practices when trading P2P?

[Melloiga]

I was just reading this thread: https://bitcointalk.org/index.php?topic=5274289

This guy got his bank account seized due to a transaction probably which was done through another person's bank account. He says that he has traded on LBC and he suspects that one of those transactions might be the reason why his account got seized.

So, I was just wondering, there must be people here who have done lots of P2P trades. What are some of the best practices when trading P2P either through forum or any online exchange? What precautions to take? What things to ask for? How to make sure that the person you're receiving funds from is the same person you're talking to? Etc.

Also, share whatever advice you might have on what should one do if their account gets frozen due to this. What steps to take after and do tell if you know of a case similar to this and what came out of it.

I know that it is going to be suggested to not trade P2P at all and use exchanges which send/receive funds themselves. But P2P is always going to exist. Even when Bitcoin was kind of banned WazirX did allow P2P trades.

Therefore, I ask the expert traders to kindly share their expertise on how to go about doing P2P trades safely. So others do not get into trouble as the guy in the above mentioned thread did.

Thanks!

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[akram143]

Particularly when someone trading on LBC then the first thing to do is to check the account verification status and also you can find from where that account IP address was registered so you can get an idea from where this person is selling/buying bitcoins to you.

Then look for their trading volume and recent feedbacks, if the user don't have any feedback in the last week then better avoid trading with them because there is a possibility of that account got hacked and used by the hacker.And keep trading with the selected people not everyone who is giving your premium price so you can build better trust between the trader.
Incase, if you got some issues like the user is facing on that mentioned thread the first step is to raise a complaint against the charge back in your bank and also into your local police station or in nearest cyber cell.Then find which trader's transaction got charged back then Dispute that particular transaction even it if already completed so the support team can freeze that trader's account and can ask for further proofs.

[allahabadi]

The only best practice is

Meet the person face to face and exchange BTC for cash 

[Melloiga]

Particularly when someone trading on LBC then the first thing to do is to check the account verification status and also you can find from where that account IP address was registered so you can get an idea from where this person is selling/buying bitcoins to you.

How can you know the IP address? Does LBC provides this detail when you do trade there with another person? I don't think they do. And what if the trader is using VPN to mask his real IP? Does account verification proves that the money being transferred came from the person doing the trade?

Incase, if you got some issues like the user is facing on that mentioned thread the first step is to raise a complaint against the charge back in your bank and also into your local police station or in nearest cyber cell.Then find which trader's transaction got charged back then Dispute that particular transaction even it if already completed so the support team can freeze that trader's account and can ask for further proofs.

I think the person in that thread is facing an issue where someone else raised a complaint that their bank account was defrauded and because of that his account got frozen because the money was transferred into his account. And I was asking, what should a person do if they find themselves in that situation?

The only best practice is

Meet the person face to face and exchange BTC for cash 

That would be illegal, I think. And can get you into a lot of trouble. If you're not doing anything wrong and got nothing to hide, why not use your bank account, so that everything is legal and white? Plus, the other reason why I wouldn't advice doing this is you might end up getting robbed?

[akram143]

Particularly when someone trading on LBC then the first thing to do is to check the account verification status and also you can find from where that account IP address was registered so you can get an idea from where this person is selling/buying bitcoins to you.

How can you know the IP address? Does LBC provides this detail when you do trade there with another person? I don't think they do. And what if the trader is using VPN to mask his real IP? Does account verification proves that the money being transferred came from the person doing the trade?

LBC does not provide their current IP address but they will show you the country where they used to register on LBC and also they cross check it with the country code I guess so someone using VPN may not be able to pass the verification.

Incase, if you got some issues like the user is facing on that mentioned thread the first step is to raise a complaint against the charge back in your bank and also into your local police station or in nearest cyber cell.Then find which trader's transaction got charged back then Dispute that particular transaction even it if already completed so the support team can freeze that trader's account and can ask for further proofs.

I think the person in that thread is facing an issue where someone else raised a complaint that their bank account was defrauded and because of that his account got frozen because the money was transferred into his account. And I was asking, what should a person do if they find themselves in that situation?

If account got froze by the banks for illegal activities as mentioned by you just because someone raised a complaint against the transaction and I guess you can do the same thing in back since cryptos are not illegal to trade in India and can mention that user is cheating you once the trade was completed as a reason.

[pakhitheboss]

I am not sure why the bank account got frozen? but, I had used P2P service when cryptocurrency trading was considered illegal by banks. I did not face a single issue back then because my Bank account was with a public sector bank. In my opinion it would be better to avoid the private sector bank to date, they still have those shady policies.

While doing P2P trade I would never put any reason for transactions debiting my account and the same was done by the party crediting the amount in my bank account.

I always did one or two transaction in a month, to date I am following the same process. My transactions were neither big nor small you can consider them to be moderate. I am following it till now.

I did not face any issue till date with these simple techniques, you can also do the same.

[Melloiga]

I always did one or two transaction in a month, to date I am following the same process. My transactions were neither big nor small you can consider them to be moderate. I am following it till now.

The guy whose account got frozen in the above mentioned thread was using SBI which he mentions himself.

But you're right, doing smaller transactions instead of bigger ones could be a good idea. It sort of spreads your chances of getting scammed in the first place. Plus the scammers probably are looking for one big transaction scam using someone's account instead of doing several transactions. And if you do happen to get into any trouble, the amount to be returned would be smaller, so that's a good advice. Thanks!

If account got froze by the banks for illegal activities as mentioned by you just because someone raised a complaint against the transaction and I guess you can do the same thing in back since cryptos are not illegal to trade in India and can mention that user is cheating you once the trade was completed as a reason.

The guy is having trouble getting to know which transaction went sour. Since, bank is not revealing any information on this matter. So, I don't think it would be that easy. It is a tricky situation. And even though BTC is kind of legal. You'd still have to answer to where you got your BTC from when the investigation begins.

[akram143]

If account got froze by the banks for illegal activities as mentioned by you just because someone raised a complaint against the transaction and I guess you can do the same thing in back since cryptos are not illegal to trade in India and can mention that user is cheating you once the trade was completed as a reason.

The guy is having trouble getting to know which transaction went sour. Since, bank is not revealing any information on this matter. So, I don't think it would be that easy. It is a tricky situation. And even though BTC is kind of legal. You'd still have to answer to where you got your BTC from when the investigation begins.

If bank is not saying anything then better try to get the things unofficially or better don't do anything until they start the investigation but he can't use his bank account until the investigation gets completed and it may take years in our country for sure.

[webtricks]

I know that it is going to be suggested to not trade P2P at all and use exchanges which send/receive funds themselves. But P2P is always going to exist. Even when Bitcoin was kind of banned WazirX did allow P2P trades.

Therefore, I ask the expert traders to kindly share their expertise on how to go about doing P2P trades safely. So others do not get into trouble as the guy in the above mentioned thread did.

Thanks!

You are right, no need to enter into P2P hassle when there is a possibility of selling coins on Exchange and get money to your Bank Account easily from Exchange's bank account. It will help you in two ways - first you are always getting clean money and second it will help you in income tax filing because all you need to do is show all transactions coming from Exchange as earnings.

But in the case, situation like past re-appear and normal exchange operations are disrupted again (although highly unlikely), I will suggest you to make sure about two things:
1. Use P2P platform which has provision of verifying trader's bank account before allowing to trade.
2. Use P2P platform which only allows trader to deposit and withdraw to single bank account (the one verified by the Exchange).

For more security or if you trade high amounts, use P2P Exchanges which have separate rating system. For example, on WazirX you have option to pick trusted buyers/sellers using XID. When you place orders under such system, platform makes sure that only trusted traders buy or sell from you.

[Melloiga]

You are right, no need to enter into P2P hassle when there is a possibility of selling coins on Exchange and get money to your Bank Account easily from Exchange's bank account. It will help you in two ways - first you are always getting clean money and second it will help you in income tax filing because all you need to do is show all transactions coming from Exchange as earnings.

But in the case, situation like past re-appear and normal exchange operations are disrupted again (although highly unlikely), I will suggest you to make sure about two things:
1. Use P2P platform which has provision of verifying trader's bank account before allowing to trade.
2. Use P2P platform which only allows trader to deposit and withdraw to single bank account (the one verified by the Exchange).

For more security or if you trade high amounts, use P2P Exchanges which have separate rating system. For example, on WazirX you have option to pick trusted buyers/sellers using XID. When you place orders under such system, platform makes sure that only trusted traders buy or sell from you.

You're so right. Using a centralized exchange certainly seems better after hearing about that guy's case. At-least you don't have to worry about where your money came from.

As for P2P, I don't know any platform that does that verifying buyer's bank accounts. They should do that actually to stop these kind of scams from happening and make BTC trading more safe and user friendly.

WazirX sure seems like are taking things really seriously and providing user's all the best options possible so they can trade without worries. Which is good for them, the user and hopefully it will be good for bitcoin's uncertain future in India.

Thank you so much for your input!

If bank is not saying anything then better try to get the things unofficially or better don't do anything until they start the investigation but he can't use his bank account until the investigation gets completed and it may take years in our country for sure.

Yes. I don't know what you mean by get things done unofficially? You mean like bribe the peon or something? I mean it might work or not but I guess you could try that. And yes, the bank account would remain frozen until they get to the bottom of the things. And they might have lot on their plate already. So it would take a very long time.

[akram143]

If bank is not saying anything then better try to get the things unofficially or better don't do anything until they start the investigation but he can't use his bank account until the investigation gets completed and it may take years in our country for sure.

Yes. I don't know what you mean by get things done unofficially? You mean like bribe the peon or something? I mean it might work or not but I guess you could try that. And yes, the bank account would remain frozen until they get to the bottom of the things. And they might have lot on their plate already. So it would take a very long time.

You can even request it from the manager and this will be possible especially if you are transacting via that bank more often and having decent amount in that account, of course it will work in India.

[allahabadi]

~

The only best practice is

Meet the person face to face and exchange BTC for cash 

That would be illegal, I think. And can get you into a lot of trouble. If you're not doing anything wrong and got nothing to hide, why not use your bank account, so that everything is legal and white? Plus, the other reason why I wouldn't advice doing this is you might end up getting robbed?

How is that illegal?
I advised against banks as a few of them hv frozen accounts in the past; why risk it if it can be avoided.
Also I didn't ask you to meet the person in an alley of a high crime  neighbourhood; u can choose Starbucks !

[Melloiga]

You can even request it from the manager and this will be possible especially if you are transacting via that bank more often and having decent amount in that account, of course it will work in India.

Yes, that could work if you're in good terms with a bank employee but it is possible that even bank don't have that information. Maybe they get told by authorities to seize the funds as it is a criminal matter and they just do what they're told.

How is that illegal?
I advised against banks as a few of them hv frozen accounts in the past; why risk it if it can be avoided.
Also I didn't ask you to meet the person in an alley of a high crime  neighbourhood; u can choose Starbucks !

It could come under Hawala transaction. And you could be charged with illegally trying to move money which could be related to black money, drugs, terrorism, etc. And so, NO!!, I don't think it is safe at all and I would not suggest any one doing that.

Also, as soon as this Bill things get clear, I think there be less of this bank accounts seizes as things will get more clear and maybe P2P platforms will start verifying bank accounts as well. And maybe they could even make it compulsory to only send fiat from verified bank accounts. And if a person send money from other account. Their Bitcoins which are held in security gets frozen until it is made clear why and/or from whose bank accounts was money transferred.

[akram143]

You can even request it from the manager and this will be possible especially if you are transacting via that bank more often and having decent amount in that account, of course it will work in India.

Yes, that could work if you're in good terms with a bank employee but it is possible that even bank don't have that information. Maybe they get told by authorities to seize the funds as it is a criminal matter and they just do what they're told.

I asked about the lien information will be revealed to the customer to one of my friend who is working on a private sector bank but he said they don't have rights to reveal it until the party who claimed for chargeback but banks have the information about which transactions are on hold.

[Melloiga]

I asked about the lien information will be revealed to the customer to one of my friend who is working on a private sector bank but he said they don't have rights to reveal it until the party who claimed for chargeback but banks have the information about which transactions are on hold.

I see. So, Banks do know which transaction was the problematic one. And you're right, Bank cannot reveal the information officially but if you have connections and/or money, you could find out about it. Great piece of information. Thank you very much!

[allahabadi]

~
It could come under Hawala transaction. And you could be charged with illegally trying to move money which could be related to black money, drugs, terrorism, etc. And so, NO!!, I don't think it is safe at all and I would not suggest any one doing that.

Also, as soon as this Bill things get clear, I think there be less of this bank accounts seizes as things will get more clear and maybe P2P platforms will start verifying bank accounts as well. And maybe they could even make it compulsory to only send fiat from verified bank accounts. And if a person send money from other account. Their Bitcoins which are held in security gets frozen until it is made clear why and/or from whose bank accounts was money transferred.

True the Bill will make things clear; but I am not convinced that dealing in hand to hand p2p is as such illegal; to avoid charges of hawala, you can use meet the person at a restaurant, send him over your BTC and he/she can send over their money using net banking or UPI in realtime. Happy?!

[akram143]

~
It could come under Hawala transaction. And you could be charged with illegally trying to move money which could be related to black money, drugs, terrorism, etc. And so, NO!!, I don't think it is safe at all and I would not suggest any one doing that.

Also, as soon as this Bill things get clear, I think there be less of this bank accounts seizes as things will get more clear and maybe P2P platforms will start verifying bank accounts as well. And maybe they could even make it compulsory to only send fiat from verified bank accounts. And if a person send money from other account. Their Bitcoins which are held in security gets frozen until it is made clear why and/or from whose bank accounts was money transferred.

True the Bill will make things clear; but I am not convinced that dealing in hand to hand p2p is as such illegal; to avoid charges of hawala, you can use meet the person at a restaurant, send him over your BTC and he/she can send over their money using net banking or UPI in realtime. Happy?!

But this is not a convenient method for trading bitcoin, and also it will take lot of time and expenses even for small conversion.

Need to be aware of counterfeit currencies and money launderers.

[Melloiga]

True the Bill will make things clear; but I am not convinced that dealing in hand to hand p2p is as such illegal; to avoid charges of hawala, you can use meet the person at a restaurant, send him over your BTC and he/she can send over their money using net banking or UPI in realtime. Happy?!

I send him BTC to his wallet. He says ''wait, let it reach 3 confirmations''. I order coffee in the meantime because I am kind. He drinks coffee, transaction confirms. He gets up, says thank you and walks away. I can't do anything but pay the bill and go home. Not happy! 

Plus, I don't know who this guy is and now I am seen meeting with him in a restaurant and having coffee. I am sorry, Sir. But I am not doing this.

And I will not advise any one else to do this. Stay at home, trade from there. The worst thing that can happen is you get your bank account frozen but at-least you're not doing anything illegal.

Also, I just learned that you can ask for ID and receipt when trading with a trader on LBTC and Paxful. You have to specify it first before starting a trade and then you can confirm whether you received funds from him or someone else.

But this is not a convenient method for trading bitcoin, and also it will take lot of time and expenses even for small conversion.

Need to be aware of counterfeit currencies and money launderers.

Yes, exactly.

[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 

[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.