Unintended Trouble: Unverified P2P Trades

Onramp.money
3 min readFeb 19, 2024

As a platform registered with the FIU and closely collaborating with law enforcement agencies, we frequently encounter situations where innocent users unintentionally become suspects or victims of crimes they did not commit. We’re addressing a prevalent case and will guide you on how to avoid it.

Safety Concerns: Unverified Apps and P2P Platform Trades

If you’re still wondering why CyberCell is sending legal notices and freezing P2P traders’ bank accounts in India, we have the answer. Let’s suppose you’re an honest user selling cryptocurrency worth 1 lakh on a P2P platform. You are matched with one or more buyers who then deposit INR to your bank account in exchange for crypto. However, if any of these buyers are linked to scams or illegal activities, your bank accounts could be frozen. The cyber police might suspect your involvement, especially when these platforms lack proper KYC procedures.

The Onramp Connection:

Now, let’s discuss the link to Onramp. One of the most common scenarios is when users find arbitrage opportunities on unverified platforms, aiming for small gains but unknowingly getting caught in unlawful activities.

For instance, consider the case where USDT on Onramp is priced at ₹90, while on an unauthorised P2P platform, it’s ₹95. A fully KYC verified Onramp user purchases USDT and goes to this platform to sell it at a better price, earning a profit. However, these unauthorised Peers or platforms may send tainted INR to their bank accounts.

The next time they return to Onramp to purchase crypto, they deposit INR that they had received from the unauthorised peer or platform, unaware that the source of the INR is illicit. This transaction then falls under suspicion.

Given that FIU registered platforms closely collaborate with law enforcement agencies, it’s the responsibility of these platforms, including Onramp, to report such transactions to the FIU immediately. This may result in your funds being on hold or account being flagged, requiring extra due diligence such as document verification, bank statements, and inquiries into the source and destination of funds.

We understand that the extra due diligence process may consume your time, money, and peace of mind, but it’s necessary to keep the crypto space safe while cooperating with the FIU.

To ensure your safety:

Avoid using foreign P2P exchanges as they often lack proper KYC or documentation of peers, making it challenging to trace scams or illegal activities.

Avoid platforms that tempt with unusual prices compared to the market; they are often associated with illicit practices

Coordinate in the due diligence process, assist with accurate documentations, and ensure the source-to-destination loop is clean from bad actors and unlawful transactions.

Trade only on verified platforms registered with the FIU for added security.

By being vigilant and cautious in your trades, you can protect yourself from unwittingly getting involved in unlawful activities and facing the consequences.

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