Bitcoin "proof of funds" question, need help/suggestions

[AHOYBRAUSE]

So, I have an urgent question on hand. I have somebody who want to buy a BIG chunk of bitcoin with cash. Before the transaction can go down he needs a proof of funds, which makes sense.

Thats what he said it should be done:

*Proof of Crypto (POC)*

1. *Configure wallets*: You need to configure Coinbase wallet or MetaMask or Kraken wallet it's up to you which one you will use. That wallet need to contain the amount of our transactions.

2. *Create a new wallet*: Following that, it's necessary to  create a new wallet that you're comfortable with, which you'll use to transfer the commission from the one you are already configured (Coinbase wallet or MetaMask wallet or Kraken Wallet).

3. ⁠*Videoconferencing*: During the process of transferring cryptocurrency from *wallet  A* to *wallet B* we must have a video call to monitor your activities and guarantee that you have authority over the funds and can transfer them to the new wallet.

Now my question is, doesn't this look a bit off? Both coinbase and kraken can suspend accounts, right? If somebody is sending a high 6 digit number in $ to those wallets they would certainly ask questions, especially in Japan. Edit: Just saw the kraken and cb don't even operate in Japan.

I had an alternative "proof of funds" which in my eyes looked reasonable, what do you think?

He could name an exact amount (like 5$, 0.00004403 btc) and the btc holder would send that amount from the address holding the full amount necessary for the deal to one of his other wallets. That proofs he is having access to the address holding the funds since it's all visible on the blockchain. The 5$ or whatever transaction will be in the history of that wallet.

Any opinions about this? Or alternative reasonable ways to show "proof of funds"? I would very much appreciate it.

[Ambatman]

Likely a scam. Especially on the video conferencing. Could transmit data you wouldn't normally do
And might send a malicious link for you to join.

Any opinions about this? Or alternative reasonable ways to show "proof of funds"? I would very much appreciate it.

Easy method. Sign a message with the private key of the address
Stating that you control the said address.
If they don't accept a sign message then just leave it. It isn't worth the risk.

I would also advice maybe using an escrow too since the funds is huge..

[AHOYBRAUSE]

Likely a scam. Especially on the video conferencing. Could transmit data you wouldn't normally do
And might send a malicious link for you to join.

Any opinions about this? Or alternative reasonable ways to show "proof of funds"? I would very much appreciate it.

Easy method. Sign a message with the private key of the address
Stating that you control the said address.
If they don't accept a sign message then just leave it. It isn't worth the risk.

I would also advice maybe using an escrow too since the funds is huge..

Should have thought about signing a message myself, haha. Stupid me! So thanks for the hint! Actually the deal is supposed to be p2p in real life, in smaller or several installments and not 1 big batch. Not sure about the legitimacy now though, what you wrote makes sense.

[mirakal]

Video conferencing...  do you really need to know each other that way? It sounds risky. You never really know if the person you’re dealing with is a scammer. If I were doing a transaction on a pure P2P basis, I’d only show my personal identity if I’m fully sure about who I’m dealing with.

Maybe the better move is getting a trusted escrow here in the forum. There are still veterans around who kept a solid reputation for many years. Bring the guy to Bitcointalk, introduce him to Bitcoin, and just do the deal here. Pay the escrow fee depending on their rate. Problem solved.

[Bluedrem]

If I'm not mistaken, the thing is - the buyer wants to verify that you have Bitcoin before buying Bitcoin from you.

If so, you ask the buyer for a Bitcoin address.

Send a small amount of Bitcoin from your main wallet to that Bitcoin address.

From the address you sent the Bitcoin to, tell him how many Bitcoins you sent so that he can be sure that it is your Bitcoin address by matching the address and the amount of Bitcoin sent.

When you send this small amount of Bitcoin, he can look at the block chain information there and find out about the funds in your wallet.

[OcTradism]

So, I have an urgent question on hand. I have somebody who want to buy a BIG chunk of bitcoin with cash. Before the transaction can go down he needs a proof of funds, which makes sense.

1. *Configure wallets*: You need to configure Coinbase wallet or MetaMask or Kraken wallet it's up to you which one you will use. That wallet need to contain the amount of our transactions.

2. *Create a new wallet*:

3. ⁠*Videoconferencing*

With Bitcoin, in years we can trade it peer to peer without proof of fund, and without Coinbase, Metamask, Kraken wallets, and no need of video conferencing. You actually know that Coinbase, Metamask and Kraken wallets are not recommended for Bitcoin users if they value non custodial, open source and privacy.

Why do we need to use such wallets for our trades, for proof of fund?
Why do we need another terrible thing, video conferencing?

The idea and the flow of trade with proof of fund is very terrible.

[coolcoinz]

As it was said, probably a scam.

My question is, why does your friend, who wants to purchase the coins, need to do this proof of funds thing? He's the one buying, so he's holding cash, right?
How is he going to send cash to you? Cash transaction implies you will meet face to face. When that happens you can show him the coins in your wallet.

For a cash transaction, choose a public place, preferably where cameras can observe you, like a lobby of a hotel, a restaurant, whatever.
Come with a friend because the buyer may also have someone with them and you don't want to be there alone watching 2 or 3 people while making a transaction.
Don't transfer coins until you check the money. You don't want to get fakes, or send everything to find out the guy turns around and runs with the money.

If it's not a cash transaction, but a simple fiat exchange where he wires you the money, it can be tricky, because even if everything is legit and he sends you the money, you'll have a hard time explaining the transfer to the tax office since there's no signed proof of sale. Like when you sell a car you sign papers, but in this case you'll only have the money on your account and nothing else. They could say that you were selling drugs to this guy. A BTC transfer from one address to another is not a proof to them because they don't know who controls that other wallet. It could be you.

[AHOYBRAUSE]

As it was said, probably a scam.

My question is, why does your friend, who wants to purchase the coins, need to do this proof of funds thing? He's the one buying, so he's holding cash, right?
How is he going to send cash to you? Cash transaction implies you will meet face to face.

As said in my previous post, the transaction is in person and nobody said anything about sending. Also, my friend is the person holding the BTC, noth the other way around. The buyer (who I only know from chatting) will get a significant amount of cash (no need to further talk about where from or anything else) and he wants to convert it into crypto, he has solid reasons for that.

He want the POF to be sure that my friend actually has the crypto, since he doesn't want to be stuck in here with a bunch of cash, which also makes sense and I understand where he is coming from. I would probably ask the same if I was in his shoes.
Yet these rules for POF look awfully strange, make no sense and can even be dangerous. It's like he only accepts this strange way while rational other suggestions get ignored for whatever reason. To be fair though, he wasn't online yet since I suggested a signed message. Though, the way he reacted so far about this subject I somehow don't think he knows what a signed message even is.

He says he doesn't want to get robbed or something like that, which makes no sense. The trail back to our forum (he messaged me here first) where I am very active would get me busted in like 24 hours, haha. Also, this country has a 99% conviction rate by the way.   And to be fair, even with a proof of funds any person could still rob him if the person wanted to. So it doesn't make any sense and just is a red flag unfortunately. Invested plenty of time and honestly also hope in this deal, but seems like it was too good to be true.

[Dogedegen]

As said in my previous post, the transaction is in person and nobody said anything about sending. Also, my friend is the person holding the BTC, noth the other way around. The buyer (who I only know from chatting) will get a significant amount of cash (no need to further talk about where from or anything else) and he wants to convert it into crypto, he has solid reasons for that.

Chatting as in online chatting? Say you were contacted on Telegram or X for this? Anyone who approaches you first on those platforms is a scammer in 99% of the cases. I've been approached by all kinds of things from OTC deals to random tokens and coins to job offers, until I turned off the messages by making them a paid thing. You can do that with premium. People need to pay to send you a message. You can set any amount but the funny thing is that even if you just set $1 for the first contact you will eliminate all DMs. That's how poor these scammers are.

He want the POF to be sure that my friend actually has the crypto, since he doesn't want to be stuck in here with a bunch of cash, which also makes sense and I understand where he is coming from. I would probably ask the same if I was in his shoes.

No that does not absolutely make sense. It sounds like it makes sense to you because you have not been on that side as a buyer. There is nothing wrong with being stuck with cash until a new seller is found. It is a complete fabrication. I've been part of deals from both sides over the years and we've had just about everything happen in terms of normal situations. Sometimes people are stuck with crypto other times with the fiat, nothing wrong and is expected. Sometimes people back out in the last moment, like literally minutes before the deal is supposed to take place even if they invested a lot of time into it by providing documents and proofs.

They lure you in with big amounts because the commission sounds lucrative. Stay away from such deals.

3. ⁠*Videoconferencing*: During the process of transferring cryptocurrency from *wallet  A* to *wallet B* we must have a video call to monitor your activities and guarantee that you have authority over the funds and can transfer them to the new wallet.[/i]

Sometimes they don't even need to send an additional link. The software used for the video conference could have a bug that grants them complete access to your system as soon as you open the link. You would not even know they hacked you because it doesn't seem suspicious, until they send all the coins away.

[AHOYBRAUSE]

As said in my previous post, the transaction is in person and nobody said anything about sending. Also, my friend is the person holding the BTC, noth the other way around. The buyer (who I only know from chatting) will get a significant amount of cash (no need to further talk about where from or anything else) and he wants to convert it into crypto, he has solid reasons for that.

Chatting as in online chatting? Say you were contacted on Telegram or X for this? Anyone who approaches you first on those platforms is a scammer in 99% of the cases. I've been approached by all kinds of things from OTC deals to random tokens and coins to job offers, until I turned off the messages by making them a paid thing. You can do that with premium. People need to pay to send you a message. You can set any amount but the funny thing is that even if you just set $1 for the first contact you will eliminate all DMs. That's how poor these scammers are.

He want the POF to be sure that my friend actually has the crypto, since he doesn't want to be stuck in here with a bunch of cash, which also makes sense and I understand where he is coming from. I would probably ask the same if I was in his shoes.

No that does not absolutely make sense. It sounds like it makes sense to you because you have not been on that side as a buyer. There is nothing wrong with being stuck with cash until a new seller is found. It is a complete fabrication. I've been part of deals from both sides over the years and we've had just about everything happen in terms of normal situations. Sometimes people are stuck with crypto other times with the fiat, nothing wrong and is expected. Sometimes people back out in the last moment, like literally minutes before the deal is supposed to take place even if they invested a lot of time into it by providing documents and proofs.

They lure you in with big amounts because the commission sounds lucrative. Stay away from such deals.

3. ⁠*Videoconferencing*: During the process of transferring cryptocurrency from *wallet  A* to *wallet B* we must have a video call to monitor your activities and guarantee that you have authority over the funds and can transfer them to the new wallet.[/i]

Sometimes they don't even need to send an additional link. The software used for the video conference could have a bug that grants them complete access to your system as soon as you open the link. You would not even know they hacked you because it doesn't seem suspicious, until they send all the coins away.

Like I have said, I have been contacted here (bitcointalk), not on telegram and not on X or anything.

Also, the buyer is not a resident here, not even close, flys over to finish a "deal" that pays him a wealthy amount of cash. He could of course take the payment as bank wire to his home country, this though would cost much more than a commission on a crypto deal. That's why the wording "being stuck with a lot of cash"was used. At least that's the story of course and once I confirm it's a scam I can tell the whole story.   Might still be true of course but getting more unlikely by the hour.

About a video call, yeah that was out of question from the beginning, just as bad as sending the funds to a wallet like coinbase, kraken, and so on. Total no go.

[Aanuoluwatofunmi]

Should we go all this far to risk our account on exchange from being banned, made a video call, just because we are making cash as a receiving currency for bitcoin, I can't accept such offer and do that, if they truly want to use huge amount of money for this purpose, they should follow the norms in which other whales are using to accumulate their assets too or buy little by little to accumulate.

[FinneysTrueVision]

Coinbase and Kraken make non-custodial wallets, which seems to be what this person was referring to. You control the private keys, so your funds can’t be frozen. The videoconferencing request does seem strange. If they ask you to download software from a link they give you, then it’s definitely a scam. I would also have some security concerns knowing that I’m being watched by somebody who is aware that I’m in possesion of a large amount of Bitcoin.

The only proof of funds that is needed is a signed message. From there you can meet at an agreed upon secure location and do the trade.

[Catenaccio]

Coinbase and Kraken make non-custodial wallets, which seems to be what this person was referring to. You control the private keys, so your funds can’t be frozen.

Frozeable or not, it depends on the cryptocurrency you hold. If it is an altcoin with smart contract like stable coin, frezee is possible.
PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets

Non-custodial is good and important butnot enough. A good wallet must be both non-custodial and open-source.

Coinbase wallet and Kraken wallet are not open source so they are not too good wallets.
https://walletscrutiny.com/?platform=allPlatforms&page=0&query-string=coinbase
https://walletscrutiny.com/?platform=allPlatforms&page=0&query-string=kraken

[ABCbits]

Thats what he said it should be done:
--snip--

Aside what other member said, you also waste some money on network TX fee and fee imposed by the custodial wallet/service.

So, I have an urgent question on hand. I have somebody who want to buy a BIG chunk of bitcoin with cash. Before the transaction can go down he needs a proof of funds, which makes sense.

I would also advice maybe using an escrow too since the funds is huge..

Since cash (physical money) is involved, i would also suggest to do the transaction in safe location while bringing someone that act as guard.

[goldkingcoiner]

Likely a scam. Especially on the video conferencing. Could transmit data you wouldn't normally do
And might send a malicious link for you to join.

Any opinions about this? Or alternative reasonable ways to show "proof of funds"? I would very much appreciate it.

Easy method. Sign a message with the private key of the address
Stating that you control the said address.
If they don't accept a sign message then just leave it. It isn't worth the risk.

I would also advice maybe using an escrow too since the funds is huge..

I agree with this^

Sounds like a total scam. Escrow is a must, otherwise you might as well donate your money to a random person. The outcome will be the same: you will never see your money again.

The proof of funds and video thing sounds sketchy and exactly how a scammer would operate in order to gain trust and appear trustworthy.

[AHOYBRAUSE]

Since cash (physical money) is involved, i would also suggest to do the transaction in safe location while bringing someone that act as guard.

Since it's cash I don't think escrow makes sense, no clue why this is getting mentioned over and over again. Also my friend (the seller) is not on bitcointalk, so it makes even less sense for him to send such a big amount of btc to a stranger, as good as the reputation might be. It's just another possibility of something to go wrong. Also, the deal in question would have been done in installations, not everything in 1 go.

Location wise I was think about renting a "business center" room at a good hotel. It's public but still private. Going in and out are cameras, and so on.
Obviously you can't make a deal like this at starbucks or what not, there is a money counting machine and more involved since it's a LOT of bills to count.

But anyway, I have my doubts it will happen. Didn't hear anything back for 22 hours now. Might be that the buyer has just some bad advisor that told him this is the way for the "POF", might also be an elaborate scam. That's why I wanted to hear more opinions about what he suggested. Obviously I am not easy to fool, I am into crypto for a while already and also have done several buy/sell deals in person in the past. Yet I forgot about the message signing tool.    An amount we are talking about here though has never been the case.

[Dogedegen]

Like I have said, I have been contacted here (bitcointalk), not on telegram and not on X or anything.

I missed that, my bad. Still my mention of Telegram has relevance. This kind of scam is much more common on Telegram these days and many more crypto users are found there than on this forum. You should keep in mind that no serious person would ever contact a random user online to do this kind of deal. It does not matter how they contact you exactly, it is just not going to happen. Transactions in large amounts are going to be done through referrals and locally. There are crypto sellers in every country in the world and usually you are just 2-3 layers of people away from knowing someone who has the right contact.

Also, the buyer is not a resident here, not even close, flys over to finish a "deal" that pays him a wealthy amount of cash. He could of course take the payment as bank wire to his home country, this though would cost much more than a commission on a crypto deal. That's why the wording "being stuck with a lot of cash"was used. At least that's the story of course and once I confirm it's a scam I can tell the whole story.   Might still be true of course but getting more unlikely by the hour.

You are making a big mistake here because you are writing as if you believe some made up story. One important rule is to never believe the story of a stranger online especially not one who wants to do business with you.

Coinbase and Kraken make non-custodial wallets, which seems to be what this person was referring to. You control the private keys, so your funds can’t be frozen.

Frozeable or not, it depends on the cryptocurrency you hold. If it is an altcoin with smart contract like stable coin, frezee is possible.
PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets

This is not relevant to this topic or this deal.

Since cash (physical money) is involved, i would also suggest to do the transaction in safe location while bringing someone that act as guard.

Since it's cash I don't think escrow makes sense, no clue why this is getting mentioned over and over again.

Escrow is used frequently in cash deals too.

Location wise I was think about renting a "business center" room at a good hotel. It's public but still private. Going in and out are cameras, and so on.
Obviously you can't make a deal like this at starbucks or what not, there is a money counting machine and more involved since it's a LOT of bills to count.

This sounds safe to you because you don't have experience conducting such deals. There are 100 ways that you could get scammed even in the hotel room. What are you going to do, report a stranger to the police that will be far away within 24 hours?

An amount we are talking about here though has never been the case.

Any deal that is lucrative and proposed by someone else is a scam. There isn't really much room for good commissions. OTC fees range between 1-5% depending on the amount of money involved. As competition heats up fees converge to lower percentages and the margin for intermediary commission evaporates.

[coolcoinz]

As it was said, probably a scam.

My question is, why does your friend, who wants to purchase the coins, need to do this proof of funds thing? He's the one buying, so he's holding cash, right?
How is he going to send cash to you? Cash transaction implies you will meet face to face.

As said in my previous post, the transaction is in person and nobody said anything about sending. Also, my friend is the person holding the BTC, noth the other way around. The buyer (who I only know from chatting) will get a significant amount of cash (no need to further talk about where from or anything else) and he wants to convert it into crypto, he has solid reasons for that.

He want the POF to be sure that my friend actually has the crypto, since he doesn't want to be stuck in here with a bunch of cash, which also makes sense and I understand where he is coming from. I would probably ask the same if I was in his shoes.
Yet these rules for POF look awfully strange, make no sense and can even be dangerous. It's like he only accepts this strange way while rational other suggestions get ignored for whatever reason. To be fair though, he wasn't online yet since I suggested a signed message. Though, the way he reacted so far about this subject I somehow don't think he knows what a signed message even is.

He says he doesn't want to get robbed or something like that, which makes no sense. The trail back to our forum (he messaged me here first) where I am very active would get me busted in like 24 hours, haha. Also, this country has a 99% conviction rate by the way.   And to be fair, even with a proof of funds any person could still rob him if the person wanted to. So it doesn't make any sense and just is a red flag unfortunately. Invested plenty of time and honestly also hope in this deal, but seems like it was too good to be true.

Thanks for making it so clear. When you wrote that you have someone who wants to buy BTC with cash and mentioned a friend, I thought the friend is the buyer

I'd avoid exchanges and instead prove I own funds by sending a few sats from my address to his wallet. Of course signing would be the best way, but I can understand he might not fully get how it works or have the means to verify the message. I guess you don't have physical exchanges in your town, the ones where you go to an office with cash and for instance, a phone, and they send you the coins while you sit comfortably drinking coffee. That would make things safe and simple for the buyer.

For future reference, if the buyer doesn't want to accept a test transaction from your wallet as PoF, I'd pass on this transaction.

[OgNasty]

There is only one proof of funds that can't be manipulated and actually matters.  That is to sign a message from a Bitcoin address holding funds.  All USD funds can be clawed back, so providing proof of USD is worthless.  Any BTC evidence other than a signed message can be manipulated, so that is totally worthless.

The correct way to do a trade like this is to use a trusted escrow to fill the gaps that satoshi was unable to.  Anything else will leave you exposed to robbery.  Especially when cash is involved.  I've heard of people meeting at police stations to avoid using an escrow, but that doesn't stop someone from following you home.

[Curious T]

Since cash (physical money) is involved, i would also suggest to do the transaction in safe location while bringing someone that act as guard.

I don't advise taking physical cash from a transaction like this. He doesn't know the person or how to find him, so if the transaction lands him in trouble, he will have no way of showing proof that it was just a transaction he did. He should receive the payment electronically, so at least there is proof to show that he sold the Bitcoin and didn't just move Bitcoin from one address to the other.
You can never be too careful, and the whole thing already looks somewhat suspicious. If he receives the payment from one account to another, that can serve as proof, just in case.