Nigeria's crypto market has been plagued by fraud as peer-to-peer (P2P) trading has become a battleground for traders and scammers. The method, which helped keep the market alive during the government's restriction on exchanges in 2021, has become a magnet for fraudulent activities. Scammers are exploiting the anonymity of cryptocurrency to launder stolen funds, leaving traders to defend against threats and navigate occupational hazards.

Traders, hoping to stay on the right side of the law, have set up guardrails to protect themselves from fraud. These precautions include refusing large sums, insisting that buyers' bank account names match their P2P platform identities, and avoiding transactions from third-party accounts. Some traders have even enforced a "no Flutterwave policy," rejecting funds sent through fintech payment processors like Flutterwave and Paystack. Despite these measures, fraudsters continue to find ways to slip through.

One of the biggest risks for P2P traders is receiving "glitch money," monies obtained by customers who take advantage of bank technical glitches to withdraw more than their balances. When these glitches occur, scammers rush to move the fraudulently obtained monies through P2P trading before the financial institution notices. In one instance, a crypto trader in Abuja, Monday Osas Ogbebor, unknowingly received glitch money from a buyer who paid through Kolomoni, a fintech app. Shortly after, his bank flagged the transaction and froze his account.

The anonymity of crypto makes it an attractive option for criminals trying to clean illicit money. While there is no figure for how much has been laundered through P2P trading in Nigeria, officials have previously claimed the amount runs into millions of dollars. A high-profile example is the case of Tijani Muiz Adeyinka, a former First Bank employee accused of diverting ₦40 billion before fleeing. The Economic and Financial Crimes Commission (EFCC) alleged that some of the stolen funds were converted into USDT, a stablecoin frequently used in P2P trading.

Scammers continue to evolve, finding new methods to exploit P2P traders. One such method is chargeback fraud, where a buyer sends money to a merchant and provides proof of payment. But after receiving the cryptocurrency, they file a dispute with their bank, falsely claiming the transaction was unauthorized. The bank then reverses the payment, leaving the merchant with no money and no crypto. Another scam, coin locking, exploits the escrow systems of P2P platforms, where a scammer initiates a trade but delays payment, keeping the seller's cryptocurrency locked in escrow.

Aside from fraudsters, traders also have to contend with well-meaning but inexperienced buyers, referred to as "normies." These first-time buyers, unfamiliar with crypto trading rules, can accidentally trigger red flags that lead to account freezes. To prevent this, traders set strict conditions, including no using crypto-related terms in transaction descriptions, no sending payments from corporate accounts, and no rounding transactions to the exact kobo amount.

Despite the daily risks, P2P traders keep coming back. The profit potential is too high, and those who survive long enough eventually learn to navigate the hazards. Some traders have begun using platforms like Bitget and Bybit, allowing them to check a buyer's transaction history before engaging. Others limit their exposure by trading in smaller amounts, capping transactions at $500 to minimize losses if things go wrong.

P2P platforms themselves are also evolving, introducing rating systems where traders can build credibility over time. Those with low ratings or multiple reports of fraud risk being locked out of the platform, with no access to their crypto assets. For now, traders treat the risks as part of the business, acknowledging that the scammers, frozen accounts, and legal headaches are occupational hazards in a high-stakes game.