There are many ways to trade digital assets, but the most common way is to use centralized exchanges like Binance. You can also sell assets with other people who own digital assets without keeping track of charts and orders. We call this Peer-to-Peer (P2P) trading.
P2P trading is a relatively simple process in which users do business directly with each other without the need for a central exchange and its order-matching engine. Sellers are free to set the price and decide how they want to be paid, and buyers are free to buy digital assets from counterparties at the prices they want.
In many markets, the number of P2P trades has increased over the past few years.
This is because there have many benefits to P2P trading, such as reaching people worldwide, having multiple payment options, not having to pay transaction fees, and being able to customize offers.
But these deals also have risks, such as violence threats, theft, or scams. In this article, we talk about how P2P traders can protect themselves from these dangers.
Recognizing Common Frauds and Scams
It is essential to realize that all trading has risks, and P2P trading is no different. The best thing users of any P2P trading platform can do to protect themselves is to know the most common ways scammers try to get them to give up their money.
Fake customer service representatives and fake receipts are two of the most common P2P scams. Users may fall for fake customer representative scams when scammers send fake security alerts about a user’s account through email and text messages or pretend to be a help representative of the P2P exchange. Users may then be sent to a fake site that looks just like the real one. They could give away important account information or digital asset wallet credentials if they don’t pay attention. In the same way, fake receipt scams are when scammers digitally change screenshots to make users think that they have done their part of the deal, which puts pressure on them to do the same.
Frauds involving chargebacks have also been a worry. This happens when fraudsters file a chargeback request after a P2P transaction is complete and say they never permitted the funds to be transferred. This could lead to the first payment being taken back, which would mean losing the digital assets and the money.
Protecting Oneself from P2P Frauds and Scams
Aside from knowing about common P2P scams, users need to learn how to protect themselves when trading with other people. Users can make it a habit to take screenshots of their transactions as proof that they were completed. Screenshots are primary evidence and can help you make your case on the P2P platform when you file an appeal. Other tips include only talking on the platform and ensuring transactions are finished before authorizing transfers.
When using any P2P platform, users should pay attention to the offer and learn how to judge the reliability of their potential counterparty. Binance has a P2P ranking feature that uses quantitative and qualitative measures to determine how reliable each P2P participant is. Each rating summarizes the user’s history on the site, including how many transactions they’ve done, how well they’ve done, and what other users have said about them. This lets users learn about a potential counterparty’s track record, behavior, and dependability. This makes trading on the P2P marketplace safer and more responsible.
If P2P traders can’t work out a problem with their counterparty in a friendly way, they can also ask customer service for help. On Binance P2P, the customer service team will respond quickly to help users with any problems they may have while using the platform.
How Exchanges Can Increase User Protection
P2P exchanges should do more than connect buyers and sellers. They should also protect buyers and sellers by securing transactions and lowering the risk of fraud. Buyers and sellers can look at ads for digital assets and post their ads while feeling safe. Feedback and rating systems make this possible.
Since the launch of P2P in 2019, Binance has been working to improve its users’ trading experience and safety.
In 2022, Binance launched the Fund Password feature, a security measure that makes transactions on the P2P exchange platform faster and safer. When users turn on this feature in their account, they may be able to avoid the problem of delayed authentication text messages caused by bad connections or problems with local mobile carriers. This can also help get orders out faster and make it less likely for users to fall for phishing SMS messages.
P2P users can improve their trading strategies over time by better understanding their cash flow and trading activity. This year, Binance made a function called “Profit and Loss” (P&L) statements so that users could get more information about their trades on Binance P2P. By looking at and downloading records of their past buy and sell orders, sellers or merchants can figure out how well their business is doing financially or look at their trade history for tax purposes.
Binance also welcomes opportunities to work with policymakers and implement complex and robust security measures across our ecosystem. Working together, we can ensure that regulations protect consumers well while encouraging progress and new ideas. When using peer-to-peer trading, users must know the most common scams to spot them. The user is the best defense against fraud and scams. Scams and hoaxes can be avoided best with knowledge and education.
