LocalBitcoins review 2023 | P2P Bitcoin trading | Finder.com

2. Man in the middle scams

This scam targets Bitcoin sellers.

How it works

The scammer tricks someone into unknowingly purchasing Bitcoin, which is sent to the scammer’s wallet. This type of scam has two victims. Victim A (VA) is someone who wants to buy something online. Victim B (VB) is someone who wants to sell Bitcoin on LocalBitcoins.

The scammer offers to sell something to VA. This can be anything sold online, such as a car, clothing or anything you’ll find on eBay or Amazon.

Once a price is agreed, the scammer offers to buy exactly that amount of Bitcoin from VB and presents VB’s payment details to VA.

Now VA ends up paying VB, who releases the Bitcoin to the scammer after receiving payment. Naturally, VA will typically not receive the goods they thought they were buying and will typically initiate chargeback procedures.

Consequently, this scam can lead to innocent Bitcoin sellers losing money and being labelled as fraudsters and even having their bank accounts cancelled.