TLDR
- Fuck the banks
- Recommendation: Set up a dedicated bank account for Bitcoin P2P trading and keep the balance low
- Money in the bank is not your money, the bank controls how, if, and when you can use it
- You can lose access to your bank accounts for several months without doing anything wrong
- A P2P trade partner can ruin your privacy when they (are forced to) leak sensitive data
- Fuck the banks
Introduction
Bitcoiners typically advocate for acquiring bitcoin P2P for good reasons, it is in the title of the whitepaper after all: "Bitcoin: A Peer-to-Peer Electronic Cash System"
The main reasons for using P2P are privacy and avoiding government regulated 3rd party companies. While you can get bitcoin P2P for services or goods, most people buy bitcoin using fiat money.
Unfortunately I have learned that is not without risk.
My horror experience with buying bitcoin P2P through the fiat banking system
I'm based in Europe and have a bank account with one of the largest banks in Europe (top 10). I started buying & selling bitcoin through HodlHodl (HH) and Peach in 2022 and all purchases/sales were done with fiat through a SEPA payment.
This is what happened:
- End of April I suddenly couldn't make any transfers with my bank account. It was on a Sunday so I thought I would wait for a day to see what happens, could be an interruption with their services
- A day later I got message that my account was blocked because of a fraud investigation and I had to call them. I immediately did so and they told me that one of my HH sales was flagged for fraud and the sender requested a chargeback. I explained my side and that I was not aware of doing anything wrong
- I provided proof over e-mail that would show that I was not guilty of fraud: Chat messages from my trading partner, the HH contract, the transaction on the timechain, everything
- I didn't hear back as they were 'investigating' according to them. A few weeks later I learned that they flagged three transactions, two from HH and one from Peach. The folks at Peach wrote and signed a latter that the chargeback against me was fraudulent and that I had met my obligations
- Time passed by and not much seemed to happen. When I e-mailed and called them again they told me: "If we are investigating the legitimacy of funds, we immediately freeze the associated account to prevent any further transfers and the resulting damage, which is also our right as a bank. We do not provide updates on the progress of the investigation until it is completed, so indeed, you will not be kept informed in the meantime."
- Late August they called me to ask for my side of the story as there was no documentation according to the person on the phone! There had been numerous phone calls and e-mails and I had documented all our communication, apparently they did not
- They told me they would now go through everything I had sent and come up with a conclusion in a week. It wasn't until two weeks later that they called me and confirmed I didn't do anything wrong and they would unblock my bank account
- In the end my bank account was blocked for more than four months
And this is what it did to me:
- I lost access to roughly one year of net earnings and was not able to meet my financial commitments as expected. I had to come up with creative ways to meet my commitments. Luckily, I did not have to any bitcoin to do so
- It severely affected my mental and physical health and relationship: Sleeping problems, stress, financial problems, nobody to talk to, focus issues
I hope someone learns something from my experience. Let me know if there are any questions :)