Buying bitcoins FAQ

Potential Risks When Buying Bitcoin on Paxful

10137 views July 19, 2017 September 29, 2017 ray 372

Paxful is a peer-to-peer marketplace where you can buy bitcoin with over 300 payment options. This means you are transacting directly with another user on the platform. Think of it like a teller at a bank or Ebay for money. We provide an escrow service to protect you. As this works between two individuals there may be some cases when everything doesn’t go as smoothly as we would like. Here are a few tips on how to protect yourself.

Potential risks and how to avoid them

 

Vendor asks you to cancel the trade after you have paid

We are keeping our eye out for scammers and are constantly banning them from our site, regrettably sometimes some still get through. A common tactic for a scamming vendor is to ask you to cancel the trade after you’ve made a payment. This scenario may go like this for example. You upload your gift card details, you know the card is unused and legit. The vendor says the card doesn’t work and asks you to cancel. The vendor then rips the card of its balance. However, if you cancel the trade the bitcoins will be released from escrow back to the vendor. If someone asks you to cancel after you’ve paid – refuse to do so, click I have paid and open a dispute. Our moderators will then investigate the trade and award the coins to who is in the right. Be ready to provide some additional proof if requested by the moderators.

Make sure you click I have paid

As mentioned above – Once you’ve followed all the vendor’s instructions and provided all the documents they need, make sure you click the “I have paid” button. If you forget to do so, the trade will time out and the bitcoin will be released from escrow back to the vendor. This is done in this way because not all trades are successful. The users may have gone away from the computer for example. To not keep the coins locked forever we need a timescale for the trade. This is set before the trade starts and you will see it in the offer terms beforehand. So, once you have given the vendor all the details and made a payment make sure you click this very important button.

Buying bitcoin with gift cards

Make sure you are the original owner of the gift cards. Many vendors will also ask for a receipt of purchase. This ties in with the Paxful terms of service. Brokering gift cards is not allowed. If you start a trade and provide a gift card that has been bought from someone else and turns out the previous owner has ripped the card, there’s no way to prove that it wasn’t you. Users who broker gift cards on Paxful will be banned. In case of a dispute where a previously owned gift card has been used the moderators will award the bitcoins to the vendor. Gift cards are a quick and easy way to purchase bitcoin. Make sure you buy it from a shop and you’ll be fine.

Make sure vendor is present befor uploading documents and making payments

We are going to start scoring vendors on their responsiveness to try and educate them to turn their offers off in case they cannot take a trade or are away from the computer. However, it is a good idea to wait until the vendor responds before making payments or uploading documents. A simple hi should do. Otherwise for example, if you upload your gift card details and the vendor happens to have gone away from the computer and does not see this. You then see the vendor is unresponsive and cancel, the vendor will still be able to see the card details. This is not safe as they may be able to redeem the balance. Before making any payments, make sure the vendor is there.

Never trade off escrow

Many scammers will try and ask you to do a trade outside of Paxful. They will ask for your contact details and get in touch. This way there’s nothing to protect you – after you’ve made a payment there are no guarantees that the seller will indeed send you the bitcoins. Also, this makes you vulnerable for social engineering and hacking. Read more about this in our blog article about safety.

If you have any concerns during a trade, wait for the dispute option to become available and don’t cancel the trade.

Was this helpful?