While you can never be 100% safe buying and selling Cryptocurrency on Paxful. They do a solid job of mitigating users’ risk. Keeping seller and buyer relationships secure.
Yet as one of the primer peer to peer bitcoin marketplaces, there’s been customer complaints of scams. So, how legit is Paxful’s platform?
Table of Contents
- Paxful Legitimacy
- Is Paxful legit and safe?
- How to safely Sell on Paxful
- How to safely Buy on Paxful
- Top 5 Way Users Can Protect Themselves on Paxful
- 1. Stay Away From Pretenders
- 2. Two-factor authentication (2FA)
- 3.Storing Bitcoin In A Digital Wallet.
- 4. Keep Receipts for good dispute
- 5. Look At Users Feedback
Paxful was founded in 2015 and is headquartered in Wilmington Delaware. Also has offices in Estonia and the Philippines. This is a company that is under continual growth with 300 employees and 3 million active users.
Paxful introduces an alternative way for users to trade and invest in cryptocurrency.
This alternative way of trading is through peer-to-peer (P2P). Their platform matches buyers and sellers that want to trade assets for crypto. Only interfering when disputes take place during trades.
Here are a few of their security highlights:
- Partners with BitGo as their wallet service provider: Bitgo is one of the most secure digital wallets on the market. Partnering with top exchanges like Gemini, Coinbase, & Binance.
- Servers are highly secure with stringent compliance requirements.
- Has support from two-factor Authenticator (2FA) google and SMS 2FA.
- Escrow Service that holds both the seller’s Cryptocurrencies and Buyers’ assets in a separate account. They will be held until the transaction is confirmed and everything approved.
Is Paxful legit and safe?
Yes, Paxful is legit and has a lot of safeguards in place to keep end-users feeling secure about trading Bitcoin. Over 20,000 trades are done every day and Paxful is seen as one of the top Crypto P2P exchanges in the world.
As with any exchange, Paxful is not untouchable. Yet the exchange’s growth and past complaints from users has made its efforts to combat scams more effectively.
In 2019 Paxful introduced AI-powered identity verification to improve KYC. Users who trade at higher volumes per trade must complete KYC procedure.
What Paxful further adds to their defenses is an Escrow feature. A seller of Cryptocurrency who actually owns Bitcoin will have to be kept safely in Paxful’s escrow account.
Users can also fin reputation ratings for all traders. The ratings are calculated based on the trader’s actions, good or bad on Paxful. This helps users make informed decisions during trades.
All these security efforts help legitimize Paxful.
How to safely Sell on Paxful
Selling on Paxful is quite thrilling but it does not have to be fearful. Many users have complained about being scammed while selling Cryptocurrency on Paxful.
There are a few ways new sellers can avoid those pitfalls. First is to pay attention to buyers’ profiles, look to see if the Email, Phone, and ID has been verified.
Secondly, see how long they’ve conducted business through Paxful. Or number of trade partners the buyer has dealt with in the past.
According to Paxful a sign of a good buyer is someone who has at least engaged in 20 trades. Trusted by other people on the platform.
Also has a good number of trader partners. All these traits really speak to the user’s history on the platform.
Once you find a buyer that is creditable and fits your criteria. It’s time to Engage with the buyer before you do carefully read the offer terms. This is important because sometimes sellers may not comply with buyers’ terms.
Solid tip, Scammers love using PayPal as a payment method. It is easy to chargeback. Even if you have been scammed PayPal often sides with the buyer.
If you like what you see. Sellers can type up the amount of Crypto specified, and then enter a live trade chat. The traded and confirmed amount of Cryptocurrency is entered into an escrow.
So, you’ve read the buyer’s instructions and followed them to a T. This means it is time to get paid! One last tip DON’T release any bitcoin from the Escrow. At least until you’ve gotten back the exact match of funds agreed upon.
How to safely Buy on Paxful
Paxful gives buyers more than 300 ways to pay for Cryptocurrency. Some of the top methods are Bank Transfers and in person. No matter the payment is chosen, the end goal is to procure Bitcoin safely. Will explain various ways buyers can trade for Bitcoin with no worries.
As we mention in our sellers’ section, buyers should check the seller’s profile before conducting trades. Here buyers can make sure information like the seller’s Email, Phone, and ID is verified.
Be sure to look at the seller’s trade partner count, number of trades, the trusted by section and sellers join date. These bits of information play a huge role in determining a seller’s credibility.
According to Paxful a sign of a good seller is someone who has at least engaged in 20 trades or more. The rest of the information mentioned should help feel in any concerns a buyer would have.
Once a seller profile has been checked and decided for a trade. Most buyers will try to rush through the buying process. Do not turn into one of those buyers.
Make sure to carefully read sellers’ terms, if happy proceed. Input the amount of BTC to be purchased and click the “Buy Now” button.
Document any and everything. This comes in handy if the seller files a dispute against the buyer. For example, buying BTC in exchange for gift cards.
Document the purchase of the gift card. Videotape the instore purchase, no funny cuts or edits. This is done in case a seller files a dispute stating that the gift card is used or stolen, you have raw proof.
Depending on the amount of BTC that’s purchased a buyer’s funds will be entered into an Escrow. Once the seller responds and verifies the payment was received. BTC is released from the Escrow System to the buyers Wallet.
Top 5 Way Users Can Protect Themselves on Paxful
The Paxful team has created loads of fun videos to help protect users trading on their platform. We highlighted a few of those tips below and included a Paxful video on How to detect scams when buying BTC.
1. Stay Away From Pretenders
A lot of users can get scammed in the buyers/seller’s live chat. Both newbie buyers and sellers may deal with scammers who ask for private user info that isn’t required for the trade.
That is why it is IMPORTANT to always read the vendors Terms before initiating a trade. You’ll know what is required beforehand to make a successful trade.
Some scammers can pretend to be moderators and reach out to users via email. Asking sellers to release your BTC from escrow. They can promise reimbursement or reward for doing so, be sure to ignore and walk away.
2. Two-factor authentication (2FA)
2FA may feel a bit over the top but when your trading large amounts of Bitcoin the extra security is worth it. Setting up a third-party 2FA app is easy.
Users can choose from third party apps like google authenticator and Authy. It’s the best way to verify certain actions like logins, exchanges, withdrawals, or send-outs.
3.Storing Bitcoin In A Digital Wallet.
Paxful like other exchanges allows users to store Bitcoin in digital wallets. The custodial wallet Paxful uses is Bitgo’s. This wallet is safe and secure, it’s used by top crypto exchanges in the industry.
Yet, if you’re not actively trading BTC probably isn’t the best idea to store in Paxful’s wallet long term. Any online account is capable of being hacked.
It’s always a good idea to store Bitcoin in a Hard wallet. Only you know the seed phrase and maintaining offline is much safer.
The biggest pro of a cold wallet is the ability to store Bitcoin offline, meaning NO connection to the web. A huge benefit for securing your cryptocurrency, it’s going to be less vulnerable to cyber-attacks.
4. Keep Receipts for good dispute
Any purchase made in the real-world needs receipt. The same goes for making trades on Paxful, users need proof of purchase. It’s one of the best ways to successfully win a dispute. Paxful doesn’t provide a receipt, so you must get creative.
A user’s proof of purchase is based on the preferred payment option. Depending on the payment method users can take photos of deposit slips for bank transfers. Utilize a combination of videos and photos to showcase gift card purchases.
Screenshots of chats between buyer and seller may also come in handy. Any form of proof you think can build a case for your dispute will help.
5. Look At Users Feedback
We mentioned this earlier in the article but a seller’s reputation means everything. Focus on a positive reputation when buying BTC. Also, use reviews to make smart trades. The same can be said for the seller’s check buyers profile and pay attention to the reviews.
Paxful is reinventing P2P bitcoin trading. Smoothing out all the kinks of an old way to barter for currency. They’ve gone to great lengths in making the whole process secure and simple.
Just like the trades being done on Paxful, not all of the security falls on them. Users must be smart and careful in their efforts to fend off scammers.