How To Avoid Being Scammed When Using P2P Cryptocurrency Trading Platforms
How to Avoid Being Scammed When Using P2P Cryptocurrency Trading Platforms
Nigerians have embraced Peer-to-Peer (P2P) trading on a larger scale following a CBN order prohibiting banks and financial institutions from conducting cryptocurrency transactions. P2P is not a new concept. Indeed, it is one of the earliest forms of cryptocurrency trading. It is the fundamental tenet of decentralized financial transactions.
P2P works by connecting people who have crypto tokens to people who have money and are ready to buy the tokens. Typically, a list of traders holding the preferred token is displayed to the buyer, who then selects the trader from whom to purchase.
Centralized exchanges started gaining grounds as more people lost money due to crypto scams which often mean that buyers do not get what they pay for in full or at all. Now that more people in Nigeria are returning to P2P trading, it is critical to conduct business in the most ethical manner possible in order to avoid telling stories that are hurtful.
So without further ado, here are the red flags to look out for to avoid getting scammed while trading P2P.
Absence of escrow partner and refund policy
While P2P enables the transfer of funds or crypto directly to a trader in exchange for crypto, the risk is that one of the two parties will choose to default on their end of the transaction. Escrow services act as a third-party administrator for all parties involved in a transaction. If a single person makes a payment for a specified amount of cryptocurrency, the payment is held by the escrow service until the buyer receives the cryptocurrency. Following that, the seller receives the agreed-upon payment for the item exchanged.
Timothy Ayodele, CEO of FireSwitch, maintains that the absence of an escrow service is a major red flag for any crypto trading platform that offers P2P services. FireSwitch specializes in developing technology solutions for businesses.
Binance offers a cryptocurrency exchange service that safeguards users' funds until the buyer confirms receipt of the cryptocurrency in full. RoqquPay utilizes a system akin to an escrow. It collects money and facilitates cryptocurrency transfers and wallet funding through the use of agents. It is flawed, however, because the funds are transferred directly to the individuals' personal accounts. As a result, they may be abused or other issues may arise with the agents.
Exchanges using an escrow system have a refund policy in place and can refund the buyer's payment if the seller fails to deliver or both parties wish to cancel the transaction. Due to the absence of an escrow system in P2P exchanges, customers have a very slim chance of receiving a refund if something goes wrong.
Number of successful trades done
Apps like Binance provide information about a P2P trader's total number of transactions, the average time it takes to transfer the cryptocurrency, user reviews from the transactions, and feedback score. These details demonstrate that the P2P trader is trustworthy and has a track record of successfully trading with other people.
Prior to transferring funds via a P2P platform, it is critical to verify that the platform provides information about merchant trading activities. Absence of these details is a red flag indicating that you cannot verify a trader's authenticity. Platforms such as Binance keep track of merchants' previous transactions, including both positive and negative reviews.
Poor ratings on the Playstore
The Playstore is a space where the majority of Nigerians feel comfortable expressing their opinions about the apps they use. When deciding which P2P exchange app to download, the comment section can help you learn about other people's experiences with the app. If customers complain about being unable to withdraw funds or make purchases, this is a red flag. Additionally, it is a red flag if users are unable to contact a customer service agent and receive prompt responses, or are unable to access any service the app is supposed to provide.
Consider the following review: "Amazing app, but I don't understand why your customer service is so bad; if something goes wrong, it will take days (or more than a week) to fix; and why don't the price alerts disappear when I delete them; I even have one issue pending since Sunday, and your so-called live chat hasn't responded to my complaints."
Complaints such as David's demonstrate that this app is currently experiencing difficulties delivering some of its services. When reviews from previous users remain consistently negative over time, it is a red flag that the user experience will be anything but smooth.
Lack of social media presence (user comments)
The final red flag to look for is a robust and active social media presence. When there are complaints or questions and other channels of communication are unavailable, the social media handles of crypto trading brands are frequently the best option. Having a social media presence is insufficient; the trading platform must be active and have a voice and soul with which customers can interact.
This instills confidence in P2P service users that the brand can be located and dragged online, as the case may be. The negative reviews of the RoqquPay app and the company's response are best explained and clarified through tweets from the company and its customers.
Lack of a social media presence is a red flag when it comes to choosing a P2P platform.
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