Hi.
My Name is mendy, my local bitcoins username is Mendy770 and this is my story; how I started selling on local bitcoin and got scammed even when I took precautions.
- I analyzed de business to see if there is profit to be made.
-I compared the prices in local bitcoin to coinbase (there are cheaper exchanges but thats my only option).
-I started looking at the prices offers that most people are not interested in, for example:
gift cards and game cards they pay you more for your btc. Let’s say you have 1 btc that in coinbase is worth 7000 usd they will pay you in gift cards the equivalent of 20000 usd so its totally worth for the guy that wants to buy a game card or gift card or tobuy at Walmart anyways, but not for people that want money (real money that you can spend anywhere anytime) also you can get scammed easily but I am going to talk later about that .
So I looked for a normal way of transfer in the us (I am not in us, but I want to get paid in usd so I looked for bank transfers in us on local bitcoin the easiest one that everyone knows is zelle transfer, you only need an email or phone number and sends instantly.
I saw that some people offer on local bitcoin for 10 percent or more above the market price.
explanation:
Lets say you have usd and want to buy bitcoin so instead of paying 6845 for one bitcoin on coinbase you would pay 7535, that means that the the person that has the bitcoin on local bitcoin is making 690 usd on each bitcoin of course, if its less that one bitcoin makes less money a 10 percent above the value on coinbase.
Of course we didn't mention that local bitcoin charges 1 percent per transaction to the advertiser on local bitcoin so now is 9 percent about 620 usd so thats not a bad profit.
now the question is why someone in his right judgment will buy more expensive than coinbase ?
1- well coinbase has limits to the amount you can buy monthly if you are a big buyer this is a big issue for you.
2- sometimes the exchanges doesn't work and you see a good opportunity to make money buying, you think will go up more than the price you wold buy on local bitcoins.
3- if you are new to bitcoin will take time till you get accepted on a exchange. you need to verify yourself and takes a month or more (if registrations are available sometimes they suspend new registration for some time to many new users and people open multiple users to hack exchanges) so you want bitcoin now .
4- some people for private reasons they like to stay anonymous, they do or don't illegal stuff so they usually buy in cash from a seller on local bitcoin and don't care to pay more because no one knows he sent the bitcoin to this illegal place.
Now I will explain the security and the way transactions are made on local bitcoin
first you need to make an account
after that
let say you want to buy bitcoin so you search for the one that gives you the cheapest price but also has good rating so it is more secure
let me show you this is the homepage of local bitcoins
now you select the best offer in this example in this cases this why because is a cash deposit and to a bank
but I am not using that one I will use the safest that is bank transfer with zelle so we click on the right bar and look for national bank transfer
now we look for the best offer.
the best offer in this case is one offer for 7268 the cheapest to buy bitcoin the user is 488 spider so we click on the username to see if is a scammer or not
he is not a scammer until you prove wrong that is the way it works on local bitcoins they usually are scammers.
what we are looking here is that the person has moved enough volume and with multiple different partners in this case I will not trust him since he has transactions with only 3 people (that can be his friends that opened a local bitcoins account) and also we need to check that he is verified with his id.
now we will see if the terms are good for me let's see
it says that less than 2 thousand for wire will be 20 usd charge.
for example if I wanted to buy 1000 usd, either I will send with zelle that is not a wire and I don't get charged 20 usd or I search for other seller where doesn't charge me 20 for 1000 but not sure I will get the same cheap price for buying 1000 with other user so in this case I will go for buying 2000 usd at 7268 so in the box we change 1000 for 2000 and see how much bitcoin we will get.
after that we write something on the white box for example send me the btc fast
now we click on the green box
after that if you are an unverified user (new user) you will have to send a selfie of you with your passport as soon that you send it then the person will verify you (after that you will not have to send your id to other people because this person verified you) now you can start the transfer.
now the seller shows you his bank account information for you to send the money
you contact the buyer to see that he is not sleeping and can send you the bitcoins he writes you.
after that you send the money to his bank account either you send him a proof of payment or wait for the person to receive the money on his bank account.
Now the seller sees the money on his account and sends the bitcoin to your wallet on local bitcoins and after that you can send it to your wallet or any exchange.
Now let me explain how I started selling.
At the begging I said that some people are selling their bitcoin for a 10 percent above the market and thats what I wanted to do but since I am new, people need to trust me so the only way people are going to trust me its if I give them a better price than the others sellers let me show you.
In this photo right on the top I see that cal coins sells cheaper than everybody at 7104 but he has limits of minimum 5000 usd so thats not for the most people so I keep searching for one that has normal limits now I see amp limit from 20 bucks to 600 thats good now I see that he is selling for 7775.
So in this case I will put my add with a price of 6800 so is very cheap now I put the add and start selling with limit is from 10 to 350.
After that I sold to some people losing money but this are small cuantities so I don't lose that much.
NOW THIS IS HOW I GOT SCAMMED.
So one who says that he wants to buy bitcoin from me and he will pay with zelle transfer thats the safest one so of course I said yes.
This person shows his verified id from local bitcoins and other users so for me that is safe his username is Dertu87h I didn’t
ask him for id now he sends me the money from an account name Kim corless and I receive the money its all good.
A few days after I see weird stuff on my bank of America account where I received the deposit from Kim corless
I call the bank, and the bank says there is fraud going on and they tell me about a transaction of 350 from Kim corless I explain them everything but they say nothing I can do I said to them I have proof that I can send to any email of Bank of America.
but they say there is no email they will decide what to do .
so what happened here is after that Kim corless send me the money he called the bank saying that he didn't send that money
now it can be that he gave his friend his phone or someone hacked him but I don't believe someone hacked his account and send me the money
now I text support on local bitcoin to freeze is btc and give them back to me they do it but he already took out the btc from his account so nothing I can do but his account now is suspended forever.
After that I see who is the people that verified this person so that they can send me his id photo and publish so everybody can see he is a scammer not just on local bitcoins but in life.
So I contacted one of the people that verified him and he told me that he didn't get his picture, what happened is that when the trade started this person sent the money before getting verified so this local bitcoin user click on id verified even that this guy didn't sent nothing and sent him the btc.
let me show you the scammer profile
if you see this guy has many partners on the trade but LOW VOLUME red flag
and he is blocked by some people thats not good. (I learn this after I got scammed.)
so what you should do if you are going to sell on local bitcoin first put on your ad that person needs to send an id selfie with the passport so you can see its him, not just a passport photo (he can send a stolen or fake passport.)
second you should check that this trader has enough volume and trade with multiple people without no complain or not blocked.
after a few days I logged in to Bank of America to pay my credit card, and I didn't see the debit card account, I called Bank of America and they told me that they have closed my account and that they don't have to explain anything to me and my account money they sent it a few weeks ago in a check to my house without telling me.
So whats the lesson?! watch out because you can loose a lot from scammers not just money also the right to have a checking account on Bank of America.
please vote and if you like to donate this is my btc address P5J3ZYxoyJvdfHPLTYkb7dS9wDcjDQdik1Dv1MmB9zzoy3FCeC5H