Tuesday, May 26, 2020

LocalBitcoins: Scammers using elaborate schemes to fraud bitcoin sellers

The Takeaway:

Scammers on Canadian exchange Localbitcoins are exploiting sellers via E-transfer scams. Many users reported that their bank accounts got frozen after making a transaction with buyers on the platform. Scammer allegedly used hacked bank accounts to purchase bitcoins from sellers.

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According to crypto analyst Fiach Dubh, several users of Canadian exchange Localbitcoins have reported that they have been victims of etransfer frauds while making transactions on the platform. The scammer attracts victims by advertising to buy bitcoins on a much higher price than the market rate.

When a user contacts the buyer to initiate a trade, the seller receives the payment in his bank account via e transfer from a different account then on Localbitcoins. The seller assumes that the transaction is valid and releases the bitcoins. But later the buyer reports the transaction as fraud to his bank and bank initiates a claw-back of the transfer. 

One user reported that he lost $1500 to the scammer and got his credit card and bank accounts frozen. Fiach Dubh also pointed out towards the possibility of that scammer might be using hacked bank accounts to make transactions. A user reported a complaint against the scammer after he suspected that something was fishy and investigated the matter. 

After looking into the accounts of some of the known scammers, Fiach Dubh found that they have been scamming users since August. It is highly advised to crossreference everything before making a transaction. And avoid the transaction if anything seems fishy. Let us know in comments what measures you take before making a transaction on an exchange. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

William Botello
William Botello
William is a market research coordinator who believes that blockchain technology and cryptocurrencies can revolutionize the financial landscape. He completed his studies in Arts and Sciences from Arizona State University.

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