Peer-to-peer (P2P) trading has been crucial for Nigeria’s crypto market, especially after government restrictions on exchanges. However, this method has attracted fraudsters who take advantage of the anonymity of cryptocurrency to engage in illicit activities. Traders have implemented various safeguards like refusing large sums, verifying buyer identities, and avoiding transactions from third-party accounts to combat fraud. Despite these measures, scammers find ways to exploit vulnerabilities.
One significant risk for P2P traders is receiving “glitch money,” which involves funds obtained through bank technical glitches or fraudulent activities. Such incidents can lead to frozen accounts and legal complications. Additionally, money laundering is a prevalent issue, with criminals exploiting crypto’s anonymity to clean illicit funds. Despite the lack of specific figures, authorities have raised concerns about significant amounts being laundered through P2P trading in Nigeria.
Fraudsters continue to evolve their tactics, with methods like chargeback fraud and coin locking becoming more common. Traders face challenges not only from scammers but also from inexperienced buyers who may unknowingly trigger account freezes. To mitigate risks, traders enforce strict rules and precautions to avoid scrutiny from banks.
Despite the risks, P2P traders persist due to the high profit potential. Some strategies include using platforms with buyer transaction history checks, limiting transaction amounts, and leveraging rating systems for credibility. While P2P platforms are improving with enhanced security features, traders acknowledge that dealing with scams and legal issues is an inherent part of the high-stakes crypto trading landscape.