Originally published on July 8, 2020 and updated on October 9, 2024

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At Paxful, we prioritize the safety of your cryptocurrency. We provide a secure and reliable platform with robust security measures and a dedicated customer support and fraud prevention team to protect your privacy, assets, and transactions.

Your safety is our top priority and a key pillar of our operation. These measures allow you to focus on smart trading while we care for the rest.

We take it so seriously that Chainalysis—a team of blockchain analysis experts trusted by leading banks and governments—named us one of the safest exchanges in the world.

To further ensure you stay safe on our platform, we’ve put together this guide to help you along your crypto journey. Keep reading to see how to stay safe when trading crypto on our platform. 

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Key takeaways

• Stay secure: Always verify your trading partner’s profile, use filters to find trustworthy offers, and never move off Paxful’s platform for trading. These three steps help avoid scams.
• Use Paxful’s tools: Escrow services, trader badges, and positive feedback scores are vital to ensure a smooth and secure transaction. Leverage these three features for safer trades.
• Protect yourself: Enable two-factor authentication (2FA), dispute transactions if something goes wrong, and always review payment details before releasing crypto. These three precautions safeguard your assets.

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Why safety matters when trading crypto

Safety and security are paramount when trading cryptocurrency. Because of their digital nature, crypto assets are susceptible to fraud. According to the Federal Bureau of Investigation (FBI), over $5.6 billion was lost to fraud in the United States in 2023, representing a 45% growth compared to 2022.

The FBI lists the following as key  reasons why criminals tend to exploit cryptocurrency:

• The decentralized nature of cryptocurrency
• Irrevocable transactions that move quickly
• Challenges to following fraud

To protect your assets and stay safe, users should verify trading partners and understand the risks involved. Paxful offers tools to identify safe offers, and staying informed about safe trading practices is vital. Safety should always be a top priority in the crypto trading world.

13 Tips and practices for secure trading at Paxful

Paxful prioritizes security to ensure that users have a safe trading experience. Safety and security are collaborative activities to ensure buyers and sellers have a secure environment for cryptocurrency transactions. Below are essential security practices that every trader should follow.

1. Enable filters

Using filters on Paxful allows you to customize your trading experience. You narrow your choices by setting specific criteria, such as payment methods, offer location, and reputation levels. This helps you identify reliable partners and avoid potentially risky transactions. Some of the filters include:

• Recently active traders: This filter ensures you’re dealing with active users on the platform and are likely to respond quickly, reducing the chances of your funds being tied up in trades that could expire due to inactivity. Typically, these users have been online in the last ten minutes.
• Verified offers: This option ensures that you are trading with individuals who have met a certain trading threshold, such as previous fair trading and minimum volume requirements. This reduces the risk of falling victim to fraudulent transactions.

2. Review trader profile

At Paxful, we take the user verification process seriously to ensure a safe environment for all users. Our team closely monitors each verification level, and we encourage all users to complete the following steps to enhance the security of their trades. Here are some ways of checking a trader profile:

Check verification level

Check the following on a user profile:

• Phone verification (mandatory): Users must verify their phone number before trading. This basic layer of security ensures that users have provided a valid and reachable contact. 
• Email verification (mandatory): Users must verify their email addresses as part of the onboarding process, adding another layer of identity validation.
• ID verification: We encourage users to upload a government-issued ID. This step allows us to verify the individual’s identity and makes the platform safer by discouraging bad actors.
• Address verification: Users can also submit proof of their residential address for the highest verification level. This further establishes their identity and demonstrates a higher commitment to secure and transparent trading.

Check for positive feedback.

Before trading with a user, take the time to review their feedback. Positive feedback is crucial as it reflects the experiences of previous trading partners. A user with substantial positive feedback is generally a good sign, indicating reliability and a history of successful transactions.

Check additional trader Information.

In addition to verification status and feedback, examining the following details on a trader’s profile can provide valuable insights:

• Number of trade partners and trades: The ratio of trades to trade partners should be proportional. If a user has completed 100 trades but only has two trade partners, this may suggest they use an alternate account to artificially boost their profile.
• Trade volume: A very low trade volume compared to the number of trades can also indicate a potentially forged account. If the trade history appears inconsistent, it’s wise to proceed cautiously.
• Trusted by: A higher number of users who trust a trader indicates they are generally more reliable.
• Blocked by: Fewer users who have blocked the trader can suggest a more trustworthy individual.
• Has blocked X people: If a trader has blocked many users, it may raise questions about their trading practices. A lower number in this category typically reflects positively on their reliability.

Badges: A key indicator of trust on Paxful

On Paxful, badges are important indicators of user trustworthiness, experience, and verification status. These badges can help you assess the reliability of a trader before entering into a transaction. Users with the following badges have undergone additional verification and security checks by Paxful:

• Expert trader: These users provide a seamless trading experience. They have demonstrated reliability, a healthy trade history, and full verification. You can count on them for secure and professional transactions.
  

• Power traders: These are recognized as high-volume traders. They are frequent and experienced users with solid track records of activity and reliability.
  

• Corporate account: Verified accounts representing businesses that buy and sell crypto. They typically deal in larger volumes and are held to strict verification standards by Paxful.
  

3. Carefully analyze the details of the offer

To ensure a successful and secure transaction, entering a trade as well-informed as possible is crucial. Here are some key aspects to consider before proceeding with an offer:

• Offer Terms: Always read the seller’s terms before accepting an offer. This is where the seller outlines their requirements and expectations for the trade. Only agree to the trade if you can meet all the stated conditions. Make sure you have everything prepared before starting the trade. If you need more clarification or can’t fulfill the terms, it’s best to look for another offer that suits your needs.
• Price: The crypto price can vary depending on the vendor’s fee. If an offer appears to have a price too good to be true, consider it a potential red flag. Scammers often lure buyers with significantly below-market prices, so always check that the price makes sense in the context of current market rates and standard vendor fees.

4. Chatting etiquette

At all times, chat professionally with your partner. This will ensure you only discuss trading topics in the chat and help you trade with your partner more efficiently. However, if you encounter any problems, we recommend you cancel the trade and contact our Support Team. Be sure to let them know what happened and who your trade partner was. We’ll take it from there.

5. Escrow

The Paxful’s escrow system is an independent third-party system where a seller’s assets are placed once a trade starts. Remember that Paxful doesn’t hold onto the crypto asset once it’s in escrow. 

Think of this escrow as a virtual lockbox where a trusted person secures the asset for both trading parties, only allowing access once the payment is received and confirmed. This is why we strongly recommend not moving out of escrow. 

When you move off escrow to trade on other messaging platforms, the safety of your money is not guaranteed. However, when you trade on Paxful, you can easily open a dispute if anything goes wrong. Our moderators will review the dispute and award it to the deserving party. 

If you ever receive a message from someone pretending to be a moderator or a Paxful employee and they ask you to trade outside of escrow, we recommend you start a dispute right away. No moderator will ever ask you to trade outside of escrow.

6. Enable Two-factor authentication (2FA)

An easy way to protect yourself is to enable 2FA on your account—it’s the best way to verify all your logins, transactions, send-outs, and withdrawals. It’s also your first defense against anyone who isn’t you. You should also enable your security questions and give answers only you would know.

7. Disputes

So, by now, you’ve probably heard a lot about disputes. The Dispute button will always be there to help you out if you run into trouble. However, knowing when to file a dispute can protect your money and save you time.

To effectively trade on Paxful, it’s essential to familiarize yourself with any safety information we mentioned so you know when to ask for a moderator’s help.

8. Remember that a deal’s a deal

Once both parties accept the terms, it is essential to honor the agreement. Changes to the deal after acceptance can lead to disputes. Respecting the commitment fosters trust and promotes smoother transactions.

9. Mark the trade as paid (for buyers)

After making a payment, buyers must mark the transaction as paid. This action notifies the seller that the payment is complete. Quick updates keep the trade moving smoothly and help avoid confusion.

10. Always confirm payment before releasing crypto (for sellers)

Scammers may upload false screenshots to make you believe that they’ve already transferred the funds. Some will try to convince you to release crypto before receiving the payment. As such, sellers should always verify that payment is received before releasing cryptocurrency from escrow. 

11. You have the option to cancel the trade

Traders can cancel a trade if they encounter suspicious behavior. If something seems off, it is better to be cautious. Canceling the trade can prevent financial loss and maintain a secure trading environment.

12. Never leave a trade hanging

Promptly responding to messages from trading partners is vital for a successful experience. Ignoring communication can lead to misunderstandings or anxiety for both parties. Keeping in touch throughout the trade enhances clarity and trust.

13. Do not send payment to third parties (for buyers)

Paxful doesn’t allow the use of middlemen when paying. More often than not, traders who urge you to send payment to another person’s account are bad guys.

Your safety is our top priority

At Paxful, we prioritize your safety. Our mission is to provide a secure and trustworthy platform for users to trade cryptocurrency confidently. We take extensive measures to ensure this, from robust security features to continuous monitoring for suspicious activity. You can trade knowing that we are constantly working to protect your funds and personal information.

If you ever encounter any issues or have concerns, our dedicated Support Team is here to help. Don’t hesitate to reach out—we’re always ready to assist and ensure your trading experience remains safe and smooth. Your security is our priority, and we’ll do everything to safeguard it.

Taking these tips seriously lets you keep your money and yourself safe. On top of that, these are also great trading practices that can help you become a master trader. Now, let’s get trading!

FAQ’s on Paxful safety

Trading on Paxful safely involves understanding best practices and avoiding common pitfalls. The following questions address key concerns and provide valuable strategies for secure trading.

1. What are the best practices for trading securely on Paxful?

To trade safely, users should first verify the identity of their trading partners. Checking a user’s verification status helps identify reliable traders. Using secure payment methods and avoiding sharing personal information is also wise.

2. How can I avoid scams while trading on Paxful?

It takes two to tango. While Paxful rolls out features to protect you from bad guys, users should also do their part to keep their money safe. Review offers thoroughly and stick to well-known and verified traders. Always use the chat feature to communicate clearly and ask questions. Users should also be cautious of deals that seem too good to be true, as they often are.

3. How does Paxful protect users during trades?

Paxful offers a secure escrow service that holds funds until both parties agree. This system ensures sellers receive payment only after confirming the buyer’s deposit. Additionally, Paxful’s customer support team is available to help resolve any issues.

4. What steps should beginners take to ensure safe trading on Paxful?

Beginners should start by familiarizing themselves with Paxful’s guidelines. They should practice with small trades to reduce risk and learn how the platform works. Utilizing educational resources and frequently checking for updates can enhance their trading knowledge.

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