By Dr. Pooyan Ghamari, Swiss Economist and Visionary
The growth of cryptocurrency has revolutionized the way people exchange value across the globe. Peer-to-peer (P2P) trading platforms, in particular, have empowered users to trade crypto directly with one another without centralized intermediaries. These platforms champion decentralization, offering users greater control, better rates, and faster transactions.
However, this freedom comes with significant risks.
Unlike traditional exchanges that impose strict KYC (Know Your Customer) protocols and offer custodial security, P2P platforms operate in a trust-minimized environment. Here, scammers have developed increasingly sophisticated methods to exploit unsuspecting traders.
As a Swiss economist who has closely observed the evolution of financial markets, I, Dr. Pooyan Ghamari, emphasize that understanding these scams is critical to preserving your assets and participating safely in the digital economy.
This guide will walk you through how scammers operate on P2P platforms, real-world examples, and how you can protect yourself with actionable advice.
How P2P Platforms Work
Before diving into scam techniques, it’s essential to understand how P2P platforms typically function:
- Listing Offers: Sellers post their crypto for sale, specifying rates, payment methods, and limits.
- Buyer Selection: Buyers browse and choose a seller based on the best deal, reputation, and trust score.
- Escrow Mechanism: Most reputable P2P platforms have an escrow service that locks the crypto until the payment is confirmed.
- Off-Chain Payments: Buyers usually send fiat money through external systems (bank transfer, PayPal, Zelle, etc.) outside the platform.
- Release: Once the seller confirms receiving the payment, the crypto is released to the buyer.
While this structure promotes decentralization, it also creates multiple attack points for scammers.
Top Ways Scammers Trick You on P2P Platforms
1. Fake Payment Proof
Scammers send doctored screenshots or edited transaction confirmations to “prove” they’ve paid. In reality, no funds have been transferred.
- Red Flag: Overly insistent buyer claiming urgent release.
- Protection Tip: Always independently verify the payment through your bank or payment app.
2. Chargebacks After Release
On platforms like PayPal or credit cards, after you release the crypto, buyers can file disputes claiming fraud or unauthorized transactions, forcing a refund and leaving you without crypto or money.
- Red Flag: Preference for reversible payment methods.
- Protection Tip: Avoid P2P deals involving reversible payment methods unless dealing with highly trusted users.
3. Third-Party Payments
Scammers may send payment from a third-party account (not matching the buyer’s name) and later claim unauthorized transactions.
- Red Flag: Payment coming from a different name than the buyer’s registered identity.
- Protection Tip: Only accept payments from accounts that match the buyer’s identity.
4. Overpayment Trap
Scammers “accidentally” overpay and then demand a refund of the difference. Later, they reverse the initial transaction.
- Red Flag: Buyer sends more money than required and acts panicked.
- Protection Tip: Never send refunds separately—reverse the entire transaction if necessary.
5. Fake Escrow Services
Scammers impersonate escrow services outside the platform, sending fake emails or creating cloned websites.
- Red Flag: Request to use an external escrow instead of the platform’s official system.
- Protection Tip: Use only the platform’s internal escrow. Never trust external links or emails.
6. Social Engineering and Phishing
Scammers use emotional manipulation, urgency, or fake authority (posing as customer support) to extract information or push you to unsafe practices.
- Red Flag: Unsolicited contact from “support” or urgent issues requiring immediate action.
- Protection Tip: Always contact official platform support through verified channels.
7. Platform Impersonation
Fraudsters create fake websites that look identical to legitimate P2P platforms, tricking users into depositing funds.
- Red Flag: URL slightly different (like misspelled domain names).
- Protection Tip: Always bookmark the correct URL and double-check SSL certificates.
8. Profile Manipulation
Some scammers fake good reputation by colluding with others or creating fake trade histories to appear trustworthy.
- Red Flag: New accounts with an unusually high number of trades in a short period.
- Protection Tip: Review trade history carefully and avoid “too good to be true” offers.
Real-World Examples of P2P Scams
1. The PayPal Refund Scam
A seller on a popular P2P platform accepted PayPal payment from a buyer. After releasing the crypto, the buyer filed a dispute citing “unauthorized transaction.” PayPal refunded the scammer, leaving the seller with no recourse.
2. The Fake Bank SMS Scam
A scammer initiated a bank transfer and used a spoofed SMS service to send a fake “payment received” message to the seller’s phone, urging immediate release of crypto.
3. The Phishing Escrow Scam
In this case, scammers created a replica of a major P2P platform, complete with realistic branding. Victims who visited the fake website and listed their offers lost access to both fiat and crypto assets when the attackers hijacked the transaction.
How to Protect Yourself When Using P2P Platforms
1. Rely on Escrow 100%
Never release your crypto until you’ve fully confirmed receipt of funds through your own means—not screenshots or promises.
2. Check the Buyer’s Profile Thoroughly
Look for:
- Number of completed trades
- Feedback score and reviews
- Duration of account activity
- Payment method history
3. Prefer In-Person Cash Deals for Large Trades
When dealing with significant amounts, consider meeting in a safe public space (preferably under camera surveillance) to exchange crypto for cash.
4. Understand the Payment System Risks
Each payment system has different levels of risk:
- Bank Transfers: Relatively safe if verified.
- PayPal: High risk due to chargebacks.
- Gift Cards: Highly risky and often scam-associated.
- Zelle or Venmo: Medium risk with certain precautions.
5. Keep Communications Within the Platform
Scammers often lure you to WhatsApp, Telegram, or personal emails where they can manipulate you more freely.
6. Stay Updated on New Scam Techniques
Crypto scam techniques evolve rapidly. Join trustworthy forums (like r/Bitcoin, Bitcointalk, or crypto-specific Discords) and follow updates to stay informed.
7. Never Trust External Screenshots
Screenshots are easily faked. Always verify transactions by logging into your own payment app or bank account.
8. Report Suspicious Activity
If you encounter a scammer, report them to the platform immediately to protect others. Many platforms ban bad actors based on user reports.
A Word on Personal Responsibility
Cryptocurrency empowers individuals but also places immense responsibility on them. Unlike centralized banking systems, there is often no recovery method once crypto is sent to the wrong party.
As I often emphasize in my lectures on decentralized finance, personal security practices are no longer optional but a fundamental necessity.
You are your own bank, your own regulator, and your own security officer.
P2P platforms are powerful tools for achieving financial freedom, especially for those underserved by traditional banks. However, they are also hunting grounds for scammers seeking vulnerabilities.
By staying vigilant, understanding the tactics used by fraudsters, and applying strong security measures, you can protect your crypto assets while still enjoying the benefits of decentralized trading.
As the cryptocurrency ecosystem evolves, so too must your awareness and caution.
Stay informed. Stay skeptical. Stay secure.
Written by Dr. Pooyan Ghamari
Swiss Economist and Visionary
For more expert insights into cryptocurrency, finance, and blockchain security, follow my ongoing publications and research.
