P2P cryptocurrency exchanges imply interaction between real people, where the platform acts only as a guarantor of the integrity of transactions (P2P - person to person, peer to peer). Using such platforms, you can exchange cryptocurrency directly without the participation of intermediaries.
The best p2p exchangers for 2022:
| p2p platforms | Website | Available cryptocurrencies | Verification |
| Binance P2P | binance.com | Bitcoin (BTC), Tether (USDT), Binance Coin (BNB), Ethereum (ETH), Binance USDT (BUSDT) | Required |
| Bitzlato | bitzlato.com | Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Dogecoin (DOGE), Litecoin (LTC), Dash (DASH) | Not required |
| LocalCryptos | localcryptos.com | Ethereum (ETH), Bitcoin (BTC), Litecoin (LTC), Dash (DASH) | Not required |
| Cryptolocator | cryptolocator.com | Bitcoin (BTC), Ethereum (ETH), Tether (USDT) | For transactions up to 10,000 EUR, passport verification is not required |
| OKEx P2P | https://www.okex.com/ru/p2p-markets/ | Bitcoin (BTC), Tether (USDT), Ethereum (ETH) | Required |
| PaxFul | paxful.com | Bitcoin (BTC), Tether (USDT) | Multiple levels |
| BitPapa | bitpapa.com | Bitcoin (BTC), Ethereum (ETH), Tether (USDT) | Not required |
| LocalBitcoins | Localbitcoins.net | Bitcoin (BTC) | Multiple levels |
| Garantex | Garantex.io | Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Dai (DAI) | Multiple levels |
| Hodl Hodl | hodlhodl.com | Bitcoin (BTC) | Not required |
Transfer of funds is carried out using special software and does not require the involvement of third parties. This scheme embodies the idea of decentralization, exactly the one that the creator of Bitcoin spoke about. This review from Profinvestment.com examines in detail reliable and liquid p2p platforms for exchanging cryptocurrencies.
What is a p2p cryptocurrency exchange (marketplaces)
Peer-to-peer p2p exchanges are a natural continuation of the concept aimed at removing some of the limitations of conventional BTC exchangers. Online exchanges have been the main tools for working with cryptocurrency throughout the existence of Bitcoin. Buying and selling currencies is an important component of the crypto-economy. Binance, EXMO, Kraken, Bitstamp and other exchanges generally fill this need.
However, these projects are managed by companies. This means that they have employees, there is control over all operations, the team also acts as arbitrators in case of disputes, and commissions are charged for all this.
Seeing the many shortcomings of such a system, some community members decided to transform the market by creating a new way of exchange - decentralized peer-to-peer systems run by software rather than people.
Features of legislation
Legal regulation of cryptocurrency exchange (Japan, Singapore) has been adopted in several countries, but it still requires serious improvements. This area is quite new and regulatory authorities are only developing the mechanisms of the legislative framework. In those countries where there are no significant restrictions on the use of the Internet, there are no prohibitions on the exchange of cryptocurrencies.
For the purpose of transparency of the operation of exchanges and the introduction of cryptocurrency activities into the legal field, countries such as the UK, Lithuania, Estonia, Germany, Portugal require certain information and documents for registering a platform in their jurisdiction. Among them:
- company structure and business plan;
- information about the founders and managing persons;
- financial statements and authorized capital;
- description of internal policy;
- AML/KYC policy;
- openness of information about all commissions and terms of service for clients.
The above list concerns the basic requirements for P2P platforms and may be supplemented depending on the country.
Due to the strict requirements of the legislation of some states, cryptocurrency exchanges and P2P exchange platforms are registered in offshore zones (Malta, Virgin Islands, Cyprus, Aruba, Belize and others). There is loyal legislation in regulating the financial sector and low taxes.
In the countries of the post-Soviet space, regulation of transactions with cryptocurrency is at the initial stage. In Ukraine and the Russian Federation, bills regarding the functioning of digital money are now being actively introduced. In 2022, the Ukrainian Parliament plans to approve the law on digital assets and regulate activities in this area. On the territory of the Russian Federation, on January 1, 2022, a law confirming the official status of cryptocurrency came into force, but the mechanism for the platforms’ operation has not been fully developed.
2 Cryptolocator
The Cryptolocator p2p platform is used for exchanging ETH and BTC cryptocurrencies for fiat funds.
Guarantees the honesty of the exchange, thanks to the escrow system - holding user funds until both the buyer and the seller fulfill the terms of the transaction. In addition, the site provides the opportunity to quickly exchange cryptocurrency for USDT in order to save savings from fluctuations in the cryptocurrency market. The site has been operating since 2022 and is actively developing. Applications for mobile devices and new functionality are appearing. Cryptolocator has all the necessary European licenses giving the right to carry out this type of activity. User security is ensured through an encrypted connection and two-factor authentication.
What payment methods are supported?
The user can add more than 20 different payment methods. As mentioned earlier, the system supports more than 100 types of implementation. Among them are:
- depositing cash into the account (Cash in),
- electronic wallets (Yandex.Money, QIWI, WebMoney, etc.),
- bank cards (Sberbank, VTB, Tinkoff, Alfa-Bank, etc.),
- different types of currency: both fiat and crypto.
What cryptocurrencies
The list of cryptocurrencies that can be used to carry out transactions includes all currently available tokens. Among the most popular are: BNB (Binance Coin), ETH (Ethereum), BTC (Bitcoin), USDT (TetherUS), BUSD (Binance USD), etc.
What fiat
Among the available fiat options you can find: American dollars, Russian rubles, Kazakhstani tenge, euros and other currencies from around the world.
4 LocalCryptos
LocalCryptos is a p2p platform formerly known as LocalEthereum.
Allows peer-to-peer trading of cryptocurrencies such as ETH and BTC. There are also plans to add EOS, LTC and DASH in the near future. The site supports a large number of payment methods - many large banks, electronic payment systems, cash, gift cards, etc. Security of transactions is ensured by the principle of escrow (escrow), when cryptocurrency is blocked on the user's account until payment. Thus, the chance of losing your funds is minimal, despite the fact that trading is carried out with living people. And this chance can be completely reduced to zero by choosing counterparties with good ratings and statistics.
LocalCryptos does not require any verification to work, just confirm your email address. The service's commissions are quite low - 0.25% from the creator of the ad, 0.75% from the user who responded to it. There are no commissions for depositing or withdrawing funds, with the exception of network commissions.
Trade only with verified users
The simplest but most important advice. Before making a transaction with a user, it is worth studying his profile. The reliability of the seller can be indicated by a high rating, the presence of verification and a large number of successful transactions.
The most common type of scam is when an attacker posts their own sales ad or responds to an existing one. He will not transfer funds and will try to persuade you in various ways to confirm the success of the transaction on the service. Therefore, if a user has only recently joined the service and does not have verification, then transactions with him should be carried out with caution.
It is better to trade with a trader who has good statistics
When searching for an ad in the Bitzlato P2P exchanger, it is possible to enable a filter for verified users. Then offers will be displayed only from those people who have confirmed their identity with documents. Creating an ad works the same way. In the settings, you can specify an option in which only verified users will be able to respond to the ad.
5 LocalBitcoins
LocalBitcoins is an exchange that has been operating since 2012 and has maintained a leading position throughout this time.
Allows you to make an exchange among many directions in just a few minutes. For the security of each transaction, it provides payment deposit services (escrow). One of the disadvantages is that with a zero account it is quite difficult to find a partner for a transaction. You'll have to try to pump him up to gain trust. Also, on the exchange you can only sell or buy Bitcoins (but more than 200 fiat currencies are supported).
The ad creator pays LocalBitcoins a commission of 1% of the transaction amount. The Bitcoin network commission is also taken into account.
There are limits on placing ads - a beginner can create no more than five applications - and two ways to set the price: exact or floating.
8 LocalCoinSwap
Localcoinswap is a platform launched in 2022 that supports about 30 cryptocurrencies and many fiat payment methods.
You can start trading immediately after registration, without account verification. Security is guaranteed by escrow protection of each transaction. All profits from the platform go to the development of the community. For each completed transaction, the ad creator pays 1% of the amount. Withdrawal fees are limited to those that are optimal for the current load level of the blockchain. Residents of all countries of the world can use the services of the decentralized platform.
The operating principle of p2p exchanges. Difference from regular cryptocurrency exchanges
Exchange software is used to automatically connect sellers and buyers with each other, taking into account the conditions they set.
First, let's remember how regular cryptocurrency exchanges work. The person who wants to sell Bitcoins specifies the price and amount. The created order is called an order and is placed in the so-called order book or order book. When another user wants to buy Bitcoin, he either creates his own buy order or responds to someone else's existing order that meets the conditions. After this, the system processes the transaction.
In its natural form, Bitcoin transactions can take a long time (5-10 minutes, and sometimes several hours). When it comes to fiat transfers, sometimes it takes banks several days to process them. To speed up the trading process, the cryptocurrency exchange plays the role of a trusted intermediary and instantly authorizes all transactions, even if in fact they have not yet been completed on the network.
P2P exchanges work differently to eliminate middlemen. Instead of matching orders, they match the people behind those orders. That is, when the platform sees matching sales and purchase orders, it does not process them instantly, but first connects the seller with the buyer, eliminating the need for them to use intermediaries.
Although by default the system does not require human intervention, sometimes exchange employees can act as arbitrators when disputes arise. Otherwise, the software is finely tuned for decentralized matching of traders with each other.
Verification
In most P2P platforms, mandatory verification is not required, but after passing it, the participant has a number of advantages. Among them:
- the nickname of a verified user is marked with a special symbol, indicating a higher level of trust in the exchange due to the successful experience of previous transactions;
- extended transaction limits;
- additional functions in your personal account;
- participation in a loyalty program that provides discounts on commissions;
- extended technical support in case of controversial situations (chat, instant messengers).
To complete the verification procedure, you must provide identification documents (passport, identification code), and also take a photo with them. Document verification takes about 1-3 business days. This procedure is called “KYC” (English: know your customer), if translated into Russian – “know your customer”.
How to choose a p2p exchanger
When choosing a site, you should pay attention to the following indicators:
- Reputation. It is best to turn to projects that have been working for several years without any complaints. This way you will be sure that you will not encounter fraud. Also, the system of work at these sites is already thoroughly debugged, there is no risk of software errors.
- Security – what means of protecting user finances have the developers provided.
- Payment Methods. The greater the choice of supported payment systems for sale/purchase, the more opportunities for flexible management of your funds.
- Commission fees. What percentage of the transaction amount does the platform take in its favor?
- Liquidity.
The last thing you can look at is the user interface and ease of management - if you plan to actively use the exchange for a long time, then this indicator will also matter to you.
A little about how to protect yourself from fraud. Different exchanges use different solutions for this. As a rule, this is a reputation arbitration system, face-to-face meetings of traders, or freezing of funds for the duration of trading.
The trading method on P2P exchanges does not fully protect users, leaving some vulnerabilities for fraud. BTC transactions are final and cannot be reversed, while fiat transfers, on the other hand, are often reversed. Because of this, there is a risk that the buyer will send their fiat payment, receive the Bitcoins, and then simply ask their bank for a refund, leaving the seller empty-handed.
To prevent such situations, P2P platforms integrate various functions to improve security. For example, the Coinffeine project works with a system of mandatory deposits: before making a transaction, counterparties deposit a certain amount of cryptocurrency into their accounts. If the transaction is completed successfully, they are returned back to the users.
In the event that a cause for dispute nevertheless arises, an arbitrator appointed by the community listens to the versions of both sides and draws conclusions. Frozen deposits are used to compensate the party that turned out to be right and to pay for arbitration services. To give arbitrators an incentive to judge fairly and not exceed their authority, there is a reputation system for them.
LocalBitcoins takes a completely different approach: it allows clients to arrange a personal meeting to conduct a transaction. During their time together, they must complete the transaction completely. Of course, this option is only possible if the location of the traders matches. The name of the site itself suggests that this feature is considered the most important one (“local” Bitcoins). This is a reliable means of increasing security.
Account requirements
Before starting P2P trading, the user must register and have a verified account.
Identification is mandatory and is a way for the exchange to verify the identity of a trading participant.
You can verify your account by entering personal data and then uploading photos of your passport (the main page and with registration).
Also, for p2p trading on binance you need to connect Google authentication and SMS.
Before starting to use the P2P exchange, each user must familiarize themselves with the Policy for Conducting Transactions between Users.
Advantages and disadvantages of P2P
pros
- The absence of a “weak link” - a centralized authority, if hacked, user accounts could be at risk.
- Independence from government agencies. While regular exchanges and exchangers are under pressure from the outside, P2P platforms do not have companies behind them that could be put under pressure.
- Anonymity. The vast majority of peer-to-peer platforms do not ask for identity verification, and some even work without registration.
- Safety. No one will be able to intercept the funds, since they are sent directly from one user to another, and do not pass through the currency accounts of third parties.
Minuses
- Low liquidity. The number of trading pairs, as well as users, is incomparably smaller than on conventional centralized platforms. Professional traders are not interested in P2P exchanges; they are used mainly for one-time exchanges.
- Dependence of transfers on the state of banks and payment systems.
- Long waiting time for transfer.
- Less intuitive interface.
Taxes on transfers and law 115 Federal Law of the Russian Federation
Article 115 of the Federal Law of the Russian Federation, which prevents money laundering and the financing of illegal activities, obliges the bank to monitor the financial transactions of its clients. If he does not comply with the requirements, his license may be revoked.
In the case of transactions with cryptocurrencies, income received by individuals is subject to a 13% tax on the amount of profit. In practice, a full-fledged mechanism for applying sanctions for carrying out these operations has not yet been developed.
Among the main points that are worth paying attention to are the limits when withdrawing funds to a bank card. If the amount exceeds 600 thousand rubles, the bank may freeze the account and demand from the recipient the source of the funds, as well as proof of payment of taxes.
