Peer-to-peer exchanges are also common among Canadians who sell or buy digital currency, matching buyers and sellers directly by trading around central intermediaries. That strongly gives them more flexibility and better opportunities through the transactions than traditional exchanges do, but it also essentially implies the increase in risks while dealing with P2P exchangers.
This article is a guideline for making secure P2P cryptocurrency trading in Canada, minimizing essential steps needed to put in place to reduce risks and trading smoothly.
Understanding P2P Exchanges
P2P exchanges, in comparison, are more like a platform where users set offers to buy or sell a specific cryptocurrency. Unlike traditional entities that actually custody users’ funds, P2P firms are simply escrow agents, holding onto a seller’s crypto until the buyer completes paying. Once payment is confirmed, the P2P exchange releases the cryptocurrency to the buyer.
Benefits of P2P Exchanges
- More Control: P2P exchanges allow each user to determine the buying and selling prices for their crypto.
- CAD Support: Many P2P platforms support Canadian Dollars (CAD), removing costs derived from changing one’s money before trading.
- Variety of Payment Methods: P2P trading often includes formats for payment other than bank transfers, such as Interac e-Transfer, cash deposits, and gift cards.
- Anonymity Potential: Some P2P exchanges have very little verification—KYC steps—required in the process, therefore leaving a considerable room allowing anonymity in small transactions.
Risks of P2P Exchanges
- Counterparty Risk: Since you trade directly with this other user, they could just as well take your payment and walk away without trading back.
- Scams: There a frequent reports of scams out of fraud accounts and fake offers on P2P altogether.
- Low Liquidity: Finding liquidity in the form of buyers or sellers for your desired amount and at your desired price might be more complicated than on other larger centralized platforms.
- Disputes and Chargebacks: Once the buyer has initiated a chargeback, some complications and possible loss occur from their end with the purchased crypto.
Safe P2P Cryptocurrency Trading Canada
To reduce risks and try to trade without ensnaring oneself, here are minimal steps needed to remain secure while using a P2P exchange based in Canada:
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- Get a trustworthy website: Research the site’s reputation and security. Look for exchanges with a proven track record, good feedback from users, and enabling more robust security functions like multi-factor authentication (MFA).
- Think of an escrow service in these platforms: Your payment reaches the seller, but crypto is not sent back until the payment is completed.
- Opt for verified users: Before carrying out any trade, one must first check out the seller’s or buyer’s profile alongside the reputation score indicated on the platform. One can find users who have pretty many successful trades and good feedback.
- Scrutinize trade offers: Watch out for deals that are much too sweet. Vendors offering a cost much lower than market price may be out to deceive you.
- Secure communication: Only communicate through the integrated messaging system of the P2T Service. Not under any circumstance should you share your personal information or conduct any transactions outside the P2T system.
- Choose secure payment methods: Use payment methods that allow some form of dispute resolution, such as Interac e-Transfer with its “request money” feature. Steer clear of methods only one way, such as sending a cash deposit or a gift card: you cannot recover your funds. Payments become impossible to recover once scammed.
- Finishing the trade: Complete the transaction and release funds via the P2P platform’s escrow service only. Never release crypto or make payments to the seller outside the P2P platform.
- Report suspicious activity: If you detect any fraudulent activities or believe that you’ve encountered a scam, you are supposed to report it to the P2P platform help desk without further delay.
More Security Tips:
- Use 2FA: Simply enable 2FA for your P2P exchange account and the associated wallets for added security.
- Strong Passwords: Make sure your P2P exchange account and cryptocurrency wallet passwords are unique and complex.
- Keep Updated: The P2P exchange app with any of its connected software should be kept updated to get all its latest security patches.
- Keep Your Crypto Safe: You could consider investing in a high-security hardware wallet for your cryptocurrency.
Put all these tips in use, and you will cut off most of the risks in peer-to-peer coin trading within Canada. Remember first to stay secure and only transact with reputable platforms, verified traders, and trustworthy payment methods. Do not shy away from reporting any suspicious activities, and always lay out uniform communication with your counterpart during trade transactions.