By Dr. Pooyan Ghamari, Swiss Economist and Visionary
You can listen to the Spotify Podcast on this topic
Cryptocurrency has revolutionized the way we think about money and finance, providing countless opportunities for traders to engage in decentralized, peer-to-peer (P2P) transactions. Binance, one of the largest and most popular cryptocurrency exchanges globally, has embraced this model, allowing users to trade digital assets directly with each other via its P2P platform. This has proven to be a game-changer for many traders looking to buy and sell USDT (Tether) and other cryptocurrencies quickly and efficiently.
However, as the popularity of Binance P2P trading continues to grow, so does the presence of scammers looking to exploit unsuspecting traders. Despite the inherent transparency and security features of blockchain technology, P2P trading still carries risks, especially when users engage in transactions with strangers. As a result, it is critical to understand the potential risks involved, be aware of the most common scams, and know how to protect yourself from falling victim to fraud.
In this comprehensive article, we will explore the top 20 Binance P2P scams every USDT trader should be aware of, provide insights into how they work, and offer practical tips to help you stay safe while trading on the platform.
Understanding Binance P2P Trading
Before we delve into the scams, it is essential to understand how Binance P2P works and why it has become so popular.
Binance P2P is a decentralized exchange platform that allows users to buy and sell cryptocurrencies directly with each other. It provides a secure environment for users by offering an escrow service, where the cryptocurrency is held in a temporary account until both parties confirm that the transaction has been completed. This system aims to reduce the risks of fraud and ensure that both parties fulfill their obligations.
USDT, a stablecoin pegged to the US dollar, is one of the most widely traded assets on Binance P2P. USDT offers a safe haven from the volatility of other cryptocurrencies, making it a preferred choice for many traders. However, despite its stability, traders must remain vigilant, as the P2P platform is still susceptible to various types of scams.
The Top 20 Binance P2P Scams to Watch Out For
1. Payment Reversal Scam
One of the most common scams on Binance P2P involves a buyer making a payment for USDT but later initiating a chargeback with their payment provider. This can result in the seller losing their USDT without receiving any funds. Scammers often use fake or stolen payment methods to execute this scam, making it difficult for the seller to prove that the transaction was legitimate.
How to avoid: Always ensure that you verify the payment before releasing the crypto from escrow. Check the payment confirmation carefully and avoid releasing the funds until you have received full payment.
2. Fake Payment Confirmation Scam
In this scam, the buyer claims to have made a payment and sends a fake payment receipt to the seller as proof. The seller releases the crypto, but the payment was never made. Scammers can manipulate email notifications or use fake screenshots to deceive the seller.
How to avoid: Never rely on payment screenshots alone. Always verify the payment directly with the payment provider or the bank before releasing any crypto.
3. Overpayment Scam
A buyer may intentionally overpay for USDT, and once the seller releases the crypto, the buyer demands a refund for the overpaid amount. This scam is designed to trick the seller into giving away more crypto than they should.
How to avoid: Only accept payment for the exact amount of crypto agreed upon. If the buyer overpays, cancel the transaction and do not release the funds until the issue is resolved.
4. Phishing Scams
Phishing scams are widespread in the cryptocurrency world. Scammers create fake Binance websites or fake communication channels that look identical to the real platform. They trick traders into entering their login credentials, which are then stolen.
How to avoid: Always ensure that you are on the official Binance platform. Double-check the URL and avoid clicking on links from unsolicited emails or messages.
5. Refund Scams
In this type of scam, a buyer claims that they sent the wrong payment amount or made an error during the transaction. They request a refund, but the seller is left without their crypto. Often, scammers use fake payment receipts to back up their claims.
How to avoid: Only release crypto once the payment has been confirmed as correct. Do not entertain requests for refunds after the transaction is complete.
6. Fake Identity Scams
Scammers may use fake identities or impersonate trusted individuals to gain the trust of traders. They may use stolen photos, fake social media profiles, or other tactics to seem legitimate.
How to avoid: Always verify the identity of the other party before proceeding with a trade. Use Binance’s built-in verification features to check the trader’s reputation and feedback.
7. Social Media Scams
In this scam, scammers create fake social media profiles and offer attractive deals on USDT or other cryptocurrencies. Once a trader agrees to the deal, they are asked to send their funds to a fake wallet, and the scammer disappears with the crypto.
How to avoid: Do not trust deals offered through social media platforms. Stick to Binance P2P, where the platform provides an escrow service for added security.
8. Escrow Manipulation Scam
Some scammers may try to manipulate the Binance P2P platform’s escrow system. They may convince a seller to release the crypto before confirming payment or attempt to exploit technical loopholes in the system.
How to avoid: Always follow the Binance P2P guidelines and never release your crypto until the payment is confirmed. Do not let anyone pressure you into bypassing the escrow process.
9. Scam Payment Methods
Scammers may use payment methods that are difficult to trace or recover, such as prepaid cards or untraceable online payment systems. Once the crypto is released, it is nearly impossible to track the payment.
How to avoid: Stick to well-known, secure payment methods, and always double-check the payment confirmation before releasing the crypto.
10. Fake Transaction Screenshots
Scammers often send fake transaction screenshots or altered payment confirmation emails to trick sellers into releasing crypto. These screenshots may look legitimate but are fabricated.
How to avoid: Never rely solely on screenshots or email confirmations. Always verify the payment using the official channels of the payment provider.
11. Simultaneous Transaction Scam
In this scam, the scammer places multiple orders to buy USDT at different prices. Once the seller fulfills one of the orders, the scammer cancels the other orders and claims they made an overpayment or that the funds were not sent.
How to avoid: Be cautious of dealing with traders who place multiple orders with varying prices. Always ensure that the payment amount matches the agreed-upon price.
12. Fake Buyer Refund Scam
Scammers impersonate legitimate buyers who have been refunded for a transaction. They use fake receipts or other fabricated documents to deceive sellers into releasing the crypto.
How to avoid: Do not release your crypto until you have confirmed the transaction has been completed. Avoid refund requests from unverified buyers.
13. Wallet Address Scams
Scammers may provide a wallet address that is similar to a legitimate one, hoping that the buyer or seller will send their funds to the wrong address. The funds are then lost, and the scammer keeps the crypto.
How to avoid: Double-check the wallet address before making any transactions. Ensure the address is correct and verified before sending any funds.
14. Overpayment Refund Scam
In this scam, the buyer intentionally overpays, and once the seller releases the crypto, they claim that the overpayment was a mistake and demand a refund. The scammer then keeps both the funds and the crypto.
How to avoid: Never release crypto until the full and correct payment is confirmed. If the payment exceeds the agreed amount, refuse to release the crypto until the issue is resolved.
15. Fake P2P Ads
Scammers create fake ads offering USDT or other cryptocurrencies at an attractive rate. Once the seller transfers the crypto, the scammer disappears, leaving the seller without their crypto and without payment.
How to avoid: Only engage with reputable and verified ads on the Binance P2P platform. Be wary of deals that seem too good to be true.
16. Fake Cryptocurrency Listings
Scammers sometimes create fake listings for cryptocurrencies that don’t exist or are not listed on Binance. They use these fake listings to convince traders to buy or sell assets that have no value.
How to avoid: Always check that the cryptocurrency is listed on Binance and confirm its legitimacy before making any transactions.
17. Account Takeover Scam
In this scam, a hacker gains access to a user’s Binance account and attempts to perform unauthorized trades. They may change the payment details, transaction history, or other account information.
How to avoid: Use strong passwords, enable two-factor authentication (2FA), and regularly monitor your account for unusual activity.
18. Chargeback Scams
In chargeback scams, the buyer uses a payment method that allows them to reverse the payment after the transaction has been completed. This leaves the seller with no funds and no crypto.
How to avoid: Use trusted and secure payment methods that do not allow chargebacks. Confirm payments before releasing any crypto.
19. Fake Trading Bots
Scammers may offer trading bots that claim to automate trades for profitable USDT transactions. These bots often result in losses or simply do not work, but the scammer takes a fee or commission.
How to avoid: Avoid using unverified trading bots, and always research their legitimacy before using them.
20. Escrow Scam
In this scam, the scammer tricks the seller into thinking that the crypto has been successfully transferred to escrow, but the funds are not actually held in escrow. Once the crypto is released, the scammer disappears with the assets.
How to avoid: Always check the status of the escrow carefully before releasing any crypto. Never release your crypto unless you have verified that the transaction is legitimate.
How to Stay Safe on Binance P2P
1. Use Binance’s Built-in Features
Binance offers several features to help secure transactions, including escrow services, user feedback, and dispute resolution. Always use these features to protect yourself and reduce the risk of falling victim to scams.
2. Verify Payments
Before releasing any crypto, always ensure that the payment has been received and verified. Use official payment channels and check with your payment provider if necessary.
3. Check User Feedback
Always check the buyer or seller’s feedback score and transaction history. A high rating and positive reviews are good indicators of a reliable trader.
4. Enable Two-Factor Authentication (2FA)
Two-factor authentication adds an extra layer of security to your Binance account. Enable 2FA to protect your account from unauthorized access.
5. Stay Informed
Stay up to date on the latest scams in the crypto world. Knowledge is your best defense against fraud.
The world of Binance P2P trading offers many exciting opportunities, but it also comes with its fair share of risks. By understanding the top 20 scams that can occur in the Binance P2P ecosystem and following the safety tips provided in this article, you can significantly reduce the likelihood of falling victim to fraud. Always exercise caution, verify payments, and use Binance’s security features to protect your funds. With the right precautions, you can navigate the world of P2P trading confidently and safely.
Dr. Pooyan Ghamari, Swiss Economist and Visionary, offers unparalleled insights into the cryptocurrency market, helping traders and investors navigate the complexities of digital finance while safeguarding their investments.
