This post is a continuation from the last one. The threat of being ripped off or scammed on LocalBitcoin is a very real threat. One that you need to be aware of.
I want to share a few stories with you.
Going to keep it short and simple. I live in a major metropolitan city, and do a lot of business of craigslist. Meet in person, public location, inspect the item, hand cash and be on my way. I’m sure I have 25+ transactions, never been scammed.
Today, I saw someone include just as a footnote “I also accept bitcoins”. Not “I only accept bitcoins” or “plz send bitcoins i mail” just a little footnote that they are fine with it.
Contacted, mentioned purchasing in cash, that was fine, and at the end decided to do it in bitcoins. Brought my laptop, public wifi, took a seat at a McDonalds. Inspected the headphones – Perfect condition, as described, everything was looking good.
He hands me a paper cutout with a wallet address, I key it into blockchain, he is looking at the address on screen. I confirm the price (80 USD, was .8xxbtc), he says good, I hit send, the little blockchain beep plays over the speakers.
He casually stands up, has the headphones, and walks away. I stand up pretty quick, and shout after to him, accusing him of theft. He says a quick comment around the lines of “If you can’t pay the price don’t waste my time, I said $80” and walks out.
I contemplate chasing after him, calling the police, or fuck maybe getting some public attention, then I realized I didn’t have a leg to stand on.
Cameras would show a guy sitting down at a table, showing me headphones, me inspecting them, then playing on a computer for a bit, with him walking off. I attempt to accuse him of theft, he probably didn’t even have $80 in his wallet, nothing would show me handing him cash, and the worst part, as I sat there with a mixture of adrenaline, rage and frustration – is that It was impossible for me to get that money back.
Can you imagine trying to talk to the police about this? So yeah officer, I sent him bitcoins, a virtually currency for this craigslist transaction, and then he walks off – Sir, do you have any proof of this? Well, he gave me this address of random letters, but I swear it’s his, but it isn’t there anymore, it’s gone to a mixing service where it gets pu-
You get the point. I have a decently hard time explaining bitcoins to my eager, willing to learn friends. I can’t imagine trying to explain it to an officer who thinks I just tried to give someone WoW gold for headphones.
So, is there any safety precaution out there I didn’t take, or should you just keep BTC and Craigslist as far apart as possible?
Thanks for reading the rant. Sorry for the wall of text. I guess I just kinda needed to get it out there.
Remember, the risk of something like the above happening increases with the amount of Bitcoin being traded for FIAT currency (Government paper or electronic currency). So if you are trying to unload a few Bitcoins to a seller, you may find yourself in a similar situation from time to time and it is best to prepare yourself in case this happen. Bring a friend with you, have them wait at the door in case the person tries to run away, or better yet, multiple friends. If you live in a country or state where it is legal to carry a concealed weapon, then you might want to consider doing this as well.
A dangerous new scamming trend? £15,000 too close
So it appears that unfortunately scammers have changed their tactics. I have been advised by police not to disclose the username or details of the person concerned until their investigation is complete but I am ok to disclose the story as a warning to others. Today I went to meet a buyer who was looking for £15,000 worth of bitcoins and wanted to pay in cash but this particular user had a good buyer history so although cautious I agreed to meet him in London in a place I knew there would be CCTV and security for my own safety. Arriving there today in a public place, all went fine initially from chatting with him but when I pulled out a quick form to comply with AML’s he seemed very uncomfortable which although I didn’t show it, it sent alarm bells ringing in my head as he kind of covered his ID whilst in terrible handwriting filled out the form and done a completely unreadable signature looking nothing like the name. At this point, I was very tempted to call the deal off simply because my gut instinct was really telling me to back out of this but he brought up he had to withdraw another £200 from his bank and so I asked him what bank he was with, which was Nationwide, which I am too, so I went with him to the branch with the cash and forms etc in my bag and said I would just sit in the branch since it had air conditioning and was only 5 stores away. In my head at this point, I was trying to get into the branch and see if I could overhear the name he was withdrawing from and also to see if he actually owned the card he had in his hand so I could match the details up with what was on the form.
Upon arrival at the branch, he handed his card over and the bank teller gave everything a quick glance and asked him for further ID and a security check so whilst he done that, I thought I would ask the teller next to him who was free if they could put it on their cash counting machine and showed all the relevant documentation. The cash went behind the counter when she agreed and put it straight on the machine without even looking at the documents surprisingly. Immediately as this happened, the male buying the bitcoins said to me “What are you doing?” looking terrified and visibly sweating and shaking and I was absolutely certain something was very wrong at this point and before I could turn to the cashier and ask her to keep hold of the documents & cash and call security and the police for me (I was planning to write it on the piece of paper in my hand to be subtle), I heard a loud beeping sound from behind the desk which was the cash machine, rejecting every note in the pile because they were counterfeit notes, £15,000 worth of them. As you can imagine, we had 3 security guards onto us in seconds and police arrived only 2 minutes later and as myself and the other male sat there in handcuffs, the police began to ask questions to me and the other male was taken into another room inside the branch.
Fortunately this day I had my CSV dumps of recent transactions, a letter from my HMRC communications recently as per my other post and also a bank statement to verify the recent transactions, plus copies of the emails I had exchanged with the male concerned as I bring them to every meeting in my bag for reference purposes if anything arises. Soon enough, having went back to the original place we met and reviewing CCTV footage of the whole thing, I was released but they kept everything in my bag, all the money of course and frozen my accounts whilst they investigate which I complied with voluntarily. The male who passed the counterfeit notes has been taken to the police station and will be in court tomorrow and I was advised by the Inspector he will probably be referred to the crown court on the matter and is being held in custody until his trial.
The bank and police were both present for this and the bank strongly recommended I be careful in future and transactions that large can be run through the bank if need be and they can be the third party to sign it and check everything out for £35, which will completely cover me for the AML’s over £10,000 and the buyer doesn’t need to go on the bank records but the bank will verify the ID is real for me in some branches too. Whilst I was there I also was given a 10 pack of pens to check notes with for future deals and police have asked me to cease trading until this case is resolved and be prepared to be asked to come to court to present testimony if required.
Again I can’t name and shame the individual due to a police request, but for what it is worth, that is the story and lesson I have learned from today and despite the many big deals I have done in the past and the many shady characters, this one has really rattled me up.
So, another recommendation if you are dealing with cash often is to get yourself some currency detection pens and a black light to check the bills for hidden logos. A quick search online will give you an idea of what to look for in the currency your country uses. Here is one more story about counterfeit money.
I occasionally trade bitcoins via localbitcoins.com, to ensure that I have a good feel for the liquidity of the market and the ability to exit at will. I’ve never had any problems before.
Last week, I responded to a request to buy $500 worth of bitcoin, via a local buyer here in San Francisco.
Nothing unusual about the meet, or the buyer, other than the fact that he wanted to find a contact for regular and higher amount buys. I think he was trying to get me to increase the amount.
Anyhow, I had funded $500 in bitcoins, in escrow with localbitcoins.com and we sat down to do the trade. He gave me 25 x $20 bills, which I counted. The bills felt a bit stiff, like brand new bills from an ATM. I looked at them carefully (or so I thought) and they seemed real. I pocketed the money and moved on.
Fast forward three days later, I go out with a friend. Just before leaving the house, I grab a few $20s and put them in my wallet. At the first bar I paid for a drink, the bartender cam running out 5 min later into the bar area to find me. He showed me the bill I had given him, said “this is fake, it fell apart when it got wet”. True enough, the bill had not held up to water like a normal bill. I showed him the other money I had on me and he confirmed it was all fake, except for one $20 I had from before. So I paid for my drink with the real money and left.
For those wondering, the bills are indistinguishable from real $20s unless you know exactly what to look for. The smell and texture are slightly off. The most important clue is that the iridescent “20” on the side that changes from red-green to black-green depending on the angle you look at it. On the fake bills it does not change color.
For my next bitcoin sale, I will be carrying a UV light and pen and will be more careful in scrutiny of the bills. As always, I will only meet in public and I am never unarmed, but now I also have counterfeit detection gear.
Seller Beware – Counterfeit money being passed to bitcoin sellers in San Francisco
Edit: I will be writing an article about this for letstalkbitcoin.com and will provide links to detection tips and products to help with detection. Will also provide a more detailed story and pictures of the notes. Standby a few days for that…
Edit 2: I will be reviewing the following products against these counterfeit notes, in an upcoming article for letstalkbitcoin.com:
Dri-mark and sharpie brand pens
UV light + magnifying combos
If this is not enough to make you feel a bit uncomfortable, then you need to read them again. But what you can do is simply learn how to inspect bills for authenticity. Again, get yourself a handheld black light, a currency marker and anything else that applies to your country’s currency and you can likely protect yourself against this. If the person buying the Bitcoins off of you seems nervous, or like they are in a hurry to get away, then take greater caution with this buyer. Always try to find buyers with good feedback (although this is not perfect), possibly ask for ID if you would feel more comfortable, and bring a friend with you, but do not make it obvious that you brought a friend with you. Getting scammed, robbed or ripped off sucks, and you need to do whatever you can to avoid it happening to you.