Bitcoin and Bank Fraud Demystified...

Anybody who has been involved with Bitcoin and alternative crypto currencies will be fully aware of the situation that arises when it comes to converting crypto into fiat currency. Yes I'm attempting an explanation of what is going on, you see when we want to exchange our crypto into fiat, for most we have to employ the services of an exchange site in order to find a buyer.

Some people use places like coinbase and kraken and have no problems with sharing their identification with these websites, which in my mind is utterly ludicrous. Bitcoin was created to end the banks monopoly and give the people of the world an anonymous mechanism of trade, yet people are willingly handing over their identification to what can only be considered unknown actors who work for the state, which removes your anonymity.

In the UK we have a site who does not demand identification when you are selling crypto, but they will not allow you to buy it without sharing your ID, its a step in the right direction at the least. This site is bittylicious and although they do not pay anywhere near spot price, they can not really be faulted on the service they provide.

The last option we have is another site known as localbitcoins, This would be a brilliant site if it was not populated by thieves and scammers, allow me to explain. This site is very good if you want to buy or sell Bitcoins, but you have to be extremely careful who you do business with. There are a multitude of options to buy and sell with, from the exchange of giftcards, paypal payments, bank transfers and even the ability to meet in person and trade for cash.

This all sounds fantastic but what's the catch I hear you asking, that's just it the catch is you are taking a massive risk. If you are selling Bitcoins and for example you accept a paypal payment, everything looks good and you can see that you have funds in your paypal account that match the deal you are involved with, so you release the escrow and send your coins that you believe have been paid for to the buyer. This is where things start to turn sour, as the buyer can then go and tell lies to paypal in order to get a refund which leaves you without the coin and without the fiat. The very same issue can transpire via bank transfer payments, and the giftcards are a sick joke in my opinion as it seems 99% of the giftcards that exist are only in existence to facilitate fraud, I mean come on who actually uses itunes because I don't know a single person who gives their money to this entity, and I know a lot of people.

Now the above was the nice side of things believe it or not, What also allegedly happens is people buy login details of banks from darknet markets that have allegedly been phished, and then use these details to go to localbitcoins and buy some Bitcoin from an unsuspecting seller. They obviously receive the Bitcoins after the payment has been confirmed and that is the last you ever hear from your buyer, as within 24 working hours your bank account is frozen without notice or warning. Which leads you to having to contact your bank to find out what exactly is going on.

This is where you get messed around and treated like a criminal, you are told you have to speak to the fraud team and nobody else can help you. When you finally get to speak to the fraudsters in the fraud team they basically bully you into accepting that the payment you received, was received fraudulently and the payment must be returned to the sending account, which would leave you out of pocket, and very likely lose you your banking with that establishment.

Now due to the multiple factor authentication involved with banking, I do not believe for 1 second that hacked or stolen accounts are being used here. Think about it, the current setup is the bank holds zero liability, this means that no matter what happens the bank can not lose. So knowing that the banks are threatened by Bitcoin and alternative crypto's, would it not be wise to assume that this is all the banks accumulating Bitcoin for themselves at the expense of their victims?

It is my belief that the fraud teams are all complacent with the theft of Bitcoin, you see for them they can access any account they so desire and transfer funds to any other account, knowing that as soon as it has been noticed by the account holder, they will be on the phone demanding their money be returned to them, which it always is and generally costs the unlucky seller a fraud marker on their credit file, if not the closure of their bank account.

Originally I was of the opinion that losing bank accounts will only strengthen Bitcoin, because they can not make them selves inaccessible to the masses who use crypto, as we will simply start using bank accounts of our friends and relatives until they get closed for the same reason as your own, eventually nobody will be able to have a bank account, and if nobody can have a bank account who wins?

Like I say originally I thought this to be good, but upon further analyses my original thoughts were wrong. You see if nobody can have bank accounts, how do you collect your wages from your day job?, or how do you collect your state benefits? the simple answer is you can not unless you are able to demand Bitcoin as payment, which at present is far from ideal because you can not go into tesco and pay for your shopping with Crypto unless you pay multiple fee's for a prepaid Bitcoin debit card, something else that removes your anonymity.

I could ramble on for days on these topics but I would rather not bore you, and will stick to the facts. If you want to trade your crypto currencies for fiat currency, do it with cash in person trades, do not risk losing a bank account, do not risk paypal robbing you with charge backs, and do not accept pointless giftcards that have very likely been paid for with stolen credit card info, that will cause you problems if you attach these dodgy giftcards to your real identity.

This has been going on for entirely too long, too many people have lost their bank accounts, too many people have been robbed of their Bitcoins. This all leads to everybody becoming guilty until proven innocent which we can not allow, we are innocent until proven guilty for good reason, because innocence can not be proven.

I say this with the most sincerity possible, Mind how you go trading guys....

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