Custody and cash · 23 / 86 · 2 min
Peer-to-peer trades
A peer-to-peer trade is you and another person, plus a platform in the middle. The extra risk is the human on the other side, and the payment method they chose.
The extra risk is the human on the other side and the payment method they chose.
A worked case
A buyer marks a bank transfer as sent. The seller releases the coins. The bank transfer is reversed the next day. The platform's escrow already let the coins go. The chat log does not bring them back.
How you get robbed
They pay from a stolen bank account. The bank reverses it later. You already sent the coins. Or they send a fake screenshot of a payment and rush you to release.
The check
Release coins only when the money is in your account and the rail cannot be pulled back. A platform escrow only helps if you follow its steps and it actually holds the coins.
Chat apps are where the rush happens. Slow down when they insist on leaving the platform.
The bank transfer that came back
Peer-to-peer markets match you with another person. LocalBitcoins, before it shut in 2023, was the long-running example. Paxful and others did the same job. A platform sits in the middle with an escrow and a chat. You are still dealing with a human who chose a payment method. Bank transfers can be reversed after you have released the coins. Gift cards can be stolen. A stolen bank account pays you with money the real owner will claw back.
The platform's rules decide what counts as paid. If you release escrow because a screenshot looks like a transfer, you have left the rules. Chargeback fraud of this shape is old. Crypto did not invent it. Crypto made the coin side irreversible, which is a gift to the person who receives the coins and a trap for the person who sends them first.
Read the payment method before the price. A slightly worse price from a method you understand can be cheaper than a perfect price from a method that unwinds.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
The platform's fee, and a cheat who gets the coins or the dollars.
The platform, for what counts as paid.
The platform, by holding escrow. The other person, if you release too early.
Check yourself
Is a screenshot of a bank transfer proof you were paid?
No. Screenshots are cheap to fake.
After this you can wait until a payment is really yours before you release coins.