In India, Crypto P2P transactions are on the rise. This is due in part to the RBI’s tightening of fiat transactions between crypto exchanges and users. As a result, P2P has become an increasingly popular way to buy and sell cryptocurrencies. However, with this increased popularity has come an increase in crypto P2P crimes.

Two platforms that are widely used in India for any P2P transactions are Binance and WazirX. These platforms are recognized as legitimate and trustworthy, but it’s crucial to remain vigilant when engaging in online transactions. Unfortunately, the digital realm is not immune to scams and fraudulent activities. Scammers may employ various tactics to deceive users, leading to financial losses or the theft of cryptocurrency.

In this article, we will delve into the concept of crypto peer-to-peer (P2P) trading scams (mainly for Binance P2P users), and shed light on the tactics employed by crypto scammers in this space. We will also provide tips on how to safeguard yourself from these Binance P2P scams.

Binance P2P scams

P2P Crypto scams: What are they and Some Examples?

Crypto P2P trading involves direct transactions between individuals, facilitated by a platform or exchange. Binance P2P, for instance, allows users to buy and sell cryptocurrencies directly with other users, providing a convenient way to exchange digital assets. However, it’s important to recognize that scammers may exploit this system to defraud trusting individuals.

Sending Money from Fraudulent Bank Account: Account freezing

One prevalent fraudulent tactic involves a series of orchestrated steps that aim to defraud sellers and disrupt their financial stability. Crypto scammers in this process dupe two victims:

a. Crypto seller

b. Fiat transferer

First these crypto P2P scammers deceive crypto sellers by initiating a transaction to purchase cryptocurrency from them.

They send money to the seller’s bank account, seemingly completing the payment process. However, the money that they send is from either:

a2. hacked without their consent, or

b2. duped bank accounts of third party individuals with their consent

You may think why would one in their sane mind send money with their consent. Here, the victim, sends money because they wanted to purchase something from the scammer. Imagine, a buyer transferring 150000 INR to the scammer to book a car that they saw in an ad on Olx.

Here the scammer is actually duping two individuals without involving his personal bank account.

The victim in both the cases (a2 and b2), then files an FIR for their lost money. Police, while while investigating, finds out where the amount got deposited (crypto seller’s account) and as a result of the complaint, the seller’s bank account is frozen.

The scammers effectively exploit the system, leveraging false claims and manipulation. This freeze on the seller’s account can cause severe financial loss, as their access to funds is restricted, and they may face difficulties in resolving the situation. The implications extend beyond monetary damages, potentially leading to legal consequences for the seller. Authorities may investigate the situation, and the seller may be subject to legal scrutiny or be required to provide evidence to prove their innocence. This adds further complexity and stress to an already distressing situation.

It is disheartening to hear about individuals falling victim to such scams, facing financial repercussions and legal complexities. Recently, a user shared her unfortunate experience in which she sold $560 USDT to a fraud scammer posing as a seller. As a consequence of this transaction, her bank account has been frozen due to suspected involvement in money cheating. This situation further led to the involvement of cybercrime and the subsequent demands made by them to either return the funds or insist on establishing contact with them.

Hackers are employing cunning tactics to infiltrate online platforms like Telegram and extract sensitive bank details from gullible targets. Allow me to shed light on how these scams unfold.

The scam typically begins with the scammer creating a Binance account. Within their P2P trading section, they enter the bank details of their targets, who have fallen victim to the Telegram scam. This malicious act allows the scammer to manipulate these individuals who are seeking to purchase USDT on Binance. Once a random USDT buyer on Binance initiates a transaction, they unknowingly send the funds to a victim of the Telegram scam. The buyer becomes entangled in a complex money trail orchestrated by the scammer, amplifying the financial implications of the scam.

Pretending to be customer support

Another trend that has been on the rise involves users encountering technical issues on well-established P2P platforms and seeking assistance through social media channels. It’s during these moments of vulnerability that scammers seize the opportunity to deceive users. Picture this: a scammer posing as a customer support representative for a legitimate P2P exchange reaches out and offers assistance. Eager for a resolution, users may unknowingly fall into the trap. The scammer skillfully redirects them to a website that mirrors the authentic platform, creating a deceptive illusion of familiarity. With trust established, the fake customer support agent cunningly persuades users to divulge their account details or crypto wallet credentials. Alas, this moment of misplaced trust leaves them exposed to theft and potential financial loss.

Hampering with digital proof

Beware the art of digital manipulation, my friends, for scammers possess a sinister skill. They can tamper with screenshots, creating an illusion of completed transactions, and apply pressure upon unsuspecting victims to reciprocate. In their persuasive tactics, they coax you into believing that their part of the deal has been fulfilled. But here’s the catch: they’re leading you astray.

Should you succumb to their demands without diligently verifying whether the promised funds have indeed landed in your possession, you unwittingly fall into their trap. Regrettably, the consequences are dire. Your hard-earned money slips away, slipping through your grasp, and the odds of retrieving it become dishearteningly slim.

One such case was reported by an user by username @Amarjee20773863 on Twitter.

Binance p2p scam

Source: Twitter

Here, you can see, the USDT seller received message on his phone saying that amount has been deposited. But in reality, there has been no deposit, and this message is not sent by HDFC bank. Here the scammer deliberately used a free SMS sending platform to send a false message and the seller believed the text and released the crypto. In this case, Binance will not be able to help you, as crypto is already transferred. Hence, it is very important to check your bank account balance through internet banking or mobile banking. Double confirm yourself before releasing the crypto.

Cancelling a P2P Transaction

Ah, the cunning ways of scammers know no bounds. They may go to great lengths to invalidate a completed P2P transaction. This type of scam relies on deceiving the seller and manipulating the banking system. Here’s how it typically unfolds: Once the seller has released the cryptocurrency to the buyer’s wallet, the scammer may contact their bank and falsely claim that the transaction amount was incorrect or that their account was compromised. By making such claims, the scammer aims to convince the bank to cancel the transaction and reverse the funds that were initially transferred to the seller.

The consequences of such a scam can be twofold for the seller. First, they lose the funds they released as they mistakenly believe the transaction was completed successfully. Second, the scammer may issue threats to prevent the seller from reporting the canceled transaction to the authorities, thereby complicating any potential legal action This leaves the victim in a vulnerable position, trapped between a rock and a hard place.

More Crypto Scams related articles:

Binance P2P Scams: What to do if you have already been scammed?

If you have already been scammed, it’s important to take immediate action to minimize further damage and increase your chances of recovering your losses. Here’s what you can do if you have been scammed:

  • In the event of a suspected scam or fraudulent activity, sellers should promptly report the incident to law enforcement agencies, the relevant platform or exchange, and their financial institutions. Maintaining documentation of the transaction, communication history, and any supporting evidence can prove beneficial when addressing the issue.
  • If your bank account has been frozen due to a suspected fraudulent transaction or scam, it’s important to take immediate action to resolve the situation. Reach out to your bank’s customer support as soon as possible. Inquire about the status of your frozen account and ask for information regarding the investigating officer or police station handling your case. Obtain the contact details of the investigating officer or the police station handling your case from the bank. Reach out to them through text, phone call, or video call to explain the situation and provide any relevant evidence or proof you have. Here is a copy of a notice you may receive from the cyber crime officers/police station.

    notice from police - Binance P2P scams India

    Source: Twitter

  • Be cooperative with the investigating officer and provide them with all necessary evidence, such as transaction details, screenshots, or any other supporting documents that can help prove your innocence. Follow their instructions and provide any additional information they may require. If the situation remains unresolved or if you feel that your rights are being violated, you may consider seeking legal advice from a professional, such as a lawyer specializing in financial or banking matters. They can provide guidance on the appropriate legal steps to take and help protect your interests.
  • It is crucial not to be intimidated by scammers who impersonate customer service representatives. If you find yourself in such a situation, it’s important to stay calm and take the necessary steps to protect yourself and gather evidence. Contact the official customer service channel of the company or organization directly and report the scam. Provide them with details of the incident, including any evidence you have gathered. This will help them investigate the situation and take appropriate action.

Remember, time is of the essence when it comes to reporting a scam and taking action. The sooner you act, the better your chances of minimizing the impact and recovering your funds. Additionally, by reporting the scam, you contribute to the efforts of law enforcement agencies in combating fraudulent activities and protecting others from falling victim to similar scams.

How to Protect Yourself From Binance P2P Fraud and Scams?

Having delved into the realm of P2P scams, it’s time to equip ourselves with practical tips to enhance our protection when engaging in peer-to-peer trading. Here are a few invaluable guidelines to keep in mind:

  • Always remember to capture screenshots of your transactions as concrete evidence of their completion. These screenshots play a pivotal role, serving as primary evidence in case you fall victim to a scam. They become your allies when you need to present a strong case to the P2P platform while filing an appeal. By documenting every step of the transaction journey, you arm yourself with a powerful tool to demonstrate your side of the story and reclaim what is rightfully yours.
  • A crucial rule to live by is to refrain from authorizing any transfer until you are absolutely certain that the money has landed securely in your account. Engage your scepticism and exercise caution. Take the time to double-check your account, meticulously confirming that the transaction has been successfully completed. Here’s the key: Never rely solely on your counterparty for proof of payment. To safeguard yourself from the perils of a fake receipt scam, diligently scrutinize your bank account or crypto wallet. Ensure that the funds you expect to receive from a P2P trade have indeed materialized. Only then, once you have verified the arrival of your rightful dues, should you release the funds.
  • Whenever feasible, restrict your communication with the counterparty strictly within the P2P platform where the transaction is taking place. Engaging in conversations through external channels creates an opportunity for scammers to manipulate the situation. They may maliciously raise a false dispute, denying the occurrence of the transaction altogether. Avoid communicating outside the platform through personal email or messaging apps, as it can make it harder to establish a verifiable trail of communication. Sticking to the platform’s built-in messaging system not only ensures transparency but also provides you with a higher level of protection. If a scammer tries to deny the trade, you will have concrete evidence within the platform’s messaging history to support your case.
  • It’s essential to remain extra careful to ensure that your counterparty doesn’t attempt to substitute the intended payment method mentioned in the advertisement with a cheque. This old-fashioned payment method carries an increased risk of fraud and complications. Cheques can be riddled with risks and complications, leaving you vulnerable to potential fraud or bounced payments.
  • Verifying the legitimacy of the P2P exchange and being cautious with security alerts are essential steps to protect yourself from scams as they may lead to phishing websites designed to steal your information. Only seek assistance and support from the official channels provided by the P2P exchange. Avoid clicking on links or responding to messages from unknown sources, as they may be attempting to deceive you. Before entering any personal information or making transactions, double-check the website domain to ensure you are on the official and secure website.
  • Before engaging with any loan app or financial service provider, conduct thorough research to confirm their credentials, licenses, and regulatory compliance. Check for user reviews and feedback from trusted sources to gain insights into their reputation. Carefully review the terms and conditions, including the interest rates, fees, repayment schedules, and any additional charges associated with the loan. Be wary of any terms that seem unfair or unreasonable.

Things to know Before Getting Scammed on Binance P2P platform

Once scammed, you will need a lot of patience to get your locked funds back. In some cases, bank account stays freezed for more than 2 years. You may then manually need to visit the branch, explain them face to face and get your account unfreezed.

Only deal with verified sellers. Look for ratings. Do not engage with new sellers or with no ratings.

If you have been scammed on Binance P2P, drop a comment below. We shall try our level best to help/spread the information so that no other seller falls to these scams.

Once duped, do not forget to share your story on Twitter and let others know. 

To summarise

In 2022, the national cybercrime helpline (1930) in Gujarat witnessed an influx of approximately 192 applications from concerned individuals. If we crunch the numbers, it appears that the state experienced an average of one case every two days. This staggering figure sheds light on the prevalence and urgency of cybercrime incidents within Gujarat and other Indian states during that year.

When it comes to diving into the world of crypto P2P transactions, it’s crucial to be on high alert and stay vigilant. You never know who you might be dealing with, so taking necessary precautions is an absolute must. Before you dive headfirst into any transaction, make sure you do your homework and thoroughly investigate the individuals involved. Trustworthy P2P platforms with top-notch security features can provide an added layer of protection, minimizing the chances of being duped by these sneaky schemes.

In addition, it’s absolutely vital for regulatory bodies and law enforcement agencies to tackle this mounting problem head-on by raising public awareness and adopting proactive strategies to identify and thwart crypto P2P fraud. This encompasses the implementation of more stringent regulations and penalties to deter fraudsters, while also extending support and safeguarding the rights of those unfortunate individuals who fall prey to these deceitful tactics. By actively addressing this issue, we can create a safer environment for everyone involved in crypto transactions.

To wrap things up, the rise of crypto P2P scams in India is undoubtedly a cause for serious concern. It’s crucial for all parties involved to step up and take proactive measures to combat and minimize the detrimental effects of these deceptive schemes. By staying well-informed and united in our efforts, we can effectively safeguard the credibility and advancement of the crypto industry in India.

What can we do to stop Binance P2P scams? Share this article with as many crypto users you know and ask them to share it with their friends and make everyone aware so that we can reduce such incidents from happening.