How to Avoid Fraud while buying Bitcoins via Localbitcoins?

bitcoin fraud

Someone tried to scam me while selling Bitcoins on Localbitcoins platform. I share my story down below along with tips to help you avoid them.

Bitcoin is one of the fastest growing Cryptocurrency currently available in the market and previously I've gone through in detail how one could trade (buy/sell) it to make handsome profits. Bitcoin is based upon blockchain technology that is become famous pretty fast looking forward to the potential it has to bring a massive economic revolution it the world, and just recently, China is also known to develop that their blockchain based Cryptocurrency to boost their economy.

In this brief post, I'll go through how one could avoid getting trolled while buying Bitcoins from a very popular Bitcoin trading platform called Localbitcoins.com.

Let's get into it right away. Though before we go through the tips, I'll quickly explain what Escrow means on Localbitcoins platform.

Before you begin reading, you can also checkout How to make 60,000 PKR per month trading Bitcoins.

What is Escrow Localbitcoins.com?

Imagine you're looking to buy Bitcoins from a Seller on the localbitcoins platform. You ask him to send the Bitcoins first then I'll pay. He asks vice-versa. That is to make the payment first and then he'll send the equivalent Bitcoins. 

The deal won't work. That is where the Escrow service comes in.

Escrow is like middleware. The company, localbitcoins.com holds the bitcoins from one party until the payment is successfully made to avoid any fraud.

In the above example, you'll send money to the seller's account number first, and then mark the payment as 'confirm payment'. Once the payment is confirmed from your end that is, you've made the payment on your behalf, the seller would then be prompted from the platform to release the Bitcoins as you've made the payment.

Seller would then click 'Release Bitcoins' and you'll instantly receive Bitcoins in your profile.

  • [message]
    • ##check## Beware
      • Always keep in mind that miscommunication could happen. Before trading with a person, make sure that you keep in mind the following steps before you open up a trade.

 Tip to choose a trustworthy seller on Localbitcoins

If you're knew to Localbitcoins platform, you might be worried about the trustworthiness of the seller. You would be fearing a possible fraud and what not. Below, I've laid down few tips for you.

When you're on the 'Buy Bitcoins' page, click the seller name as shown in the image below.


 Once done, it opens up profile of the seller. Notice the top section lays down information about the seller and how he has performed over the period of time.

Trade Volume: This shows the scale at which the trader is able to work. The more trade volume, you could expect the seller to have been into the industry for long and they have the capacity to do business on larger scale. It adds to the overall authority of the seller.

First purchase / Account created: This shows how long the trader has been on the platform. The more the time, this means he has been there since long and you could trust him, though this really doesn't show the seller won't scam you. It just adds to the authority of the seller. If the seller has been there since an year or more, that really adds power to his profile.

Verification: If you see 'green' checks along the verification stats, this means the seller has verified his information like phone, ID, passport etc. This shows how serious the seller is to trade on the platform.

    Trust/Blocks: These are the two MOST important metrics you need to care about the most. The more trust you see and the lesser blocks the person has, that is the right choice for you. I would not really go for a trader who has blocks more than 1-2. The more people trust the seller, the safer he would be for you.

    Comments: Then finally, always keep note of the comments. It's CRUCIAL to read all the comments a seller has. Dig down to deeper pages and see what people are saying about a trader.

    • [message]
      • ##check## My Story
        • I'll share my little story below that is a lesson worth learning for you too. A seller that I started a trade with, BUT later I found out that he was a BIG TIME SCAMMER.

     My interaction with a Scammer

     So recently I opened up a trade with a trader on localbitcoins. I had to sell Bitcoins and opened up a trade. The guy offered best rates so I opted for him. Little that I knew that there was something fishy going on.

    The moment I opened up the trade, I wasn't feeling comfortable with the trader as he was replying to me after an average of 3-5 minutes on each comment that I would do. I was furious.

    Still he asked me to transfer the Bitcoins. I did and the amount was kept in Escrow as the platform always does.

    Meanwhile I went on to read more comments/feedback on the trader's profile and found out that many people blocked him and there were comments like:

    'Never trade with this guy. He transfers hacked money from PayPal account.'

    My heart started beating as the amount was close to 1BTC. I started messaging him that 'Don't send the payment' multiple times but wasn't getting any response. I knew something was fishy as generally other traders would respond back promptly.

    I message him that I won't release the Bitcoins what so ever. I just need the trade to be canceled. He still didn't responded.

    After a while, he messaged that I have sent the payment. I was furious. I told him that I won't release Bitcoins and I don't care. As I message you tons of times and you didn't bothered to even check the comments. (He actually did, though he pretended that he hasn't checked it so that he would have an excuse).

    I made my mind to open up a dispute. Though all the scammers generally don't feel comfortable with the disputes as their 'experienced' profiles could be at stake. So he replied back 'Okeh I'll cancel the deal, though if you receive the payment, do send me back!'

    The guy obviously didn't null any money and it's been a couple of weeks that I still hasn't recieved any payment lol.

    null another bit red light was the fact that he transferred payment via 'Zoom PayPal' service. So that chances were high that he would be sending hacked amount.

    I finally received the Payment!

    Guess what, after a while, I finally did recieve the payment in my bank account. Many people in the feedback said that as his payments were via hacked money, the payments often gets reveresed so beware. I had that in my mind.

    So I kept waiting for days for the payment to get reversed. Nothing happened and the payment is Okeh!

    The tricky question?

    Once I knew that the payment was Okeh and I should ethically send back the payment to the guy, i approached him and mentioned that he should send me his account details to recieve the payment back. The guy didn't bothered to reach back!

    I ask that very common question, if it was really his hard earned money, he would have reached back to me multiple times in a month to ask if the payment was received. And when I did, he didn't bothered to reply back.


    So the take away is, that ALWAYS, read the full feedback/comments, check profile information as mentioned above and then start a trade. Also, NEVER trade with a person who sends payment via PayPal or Zoom service!

    You can't trust the payment source. Always trade with a person who sends money via localbank transfer or in cash. Though I always prefer online bank transfer, that way you know where the money is coming from atleast.

    Hope that was helpful, Happy trading.

    If you're interested to know how Bitcoins are made, checkout what Bitcoin mining is.



    The Coin Journal: Bitcoin News, Blockchain News , Prices, & Analysis: How to Avoid Fraud while buying Bitcoins via Localbitcoins?
    How to Avoid Fraud while buying Bitcoins via Localbitcoins?
    The Coin Journal: Bitcoin News, Blockchain News , Prices, & Analysis
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