Elbaite is the cryptocurrency exchange designed to make cryptocurrency trading safe. This article will go into detail on how Elbaite’s escrow account protects you from chargeback fraud.
What is a chargeback?
Chargebacks were a great safety incentive for consumers to feel safe when using online payments and be protected against fraud. It was designed to protect consumers in cases such as, the merchant not delivering the promised goods or service, or when it was delivered faulty. Or even protect a consumer from purchases made without their consent/knowledge if the card was stolen.
This model is fantastic for these cases. However, we have seen that some consumers have misused this and perpetrated fraud. This has especially been the case for peer to peer cryptocurrency trades. Peer to peer cryptocurrency trading has been notoriously plagued with chargeback fraud.
Is a chargeback reversible?
Mortaza Tollo, CEO and founder of Elbaite, was victim to many chargeback frauds before he founded Elbaite.
“After an agreed purchase I would send my cryptocurrency to someone, the buyer would then transfer the funds to my bank account. However, the next day they would file a chargeback. Not only would the scammers receive my cryptocurrency, but they also got their money back from the bank. It would then take over two months of discussion with the banks to reverse some of these chargebacks. However, a lot of people were not so lucky and have thus been scammed and victim of fraud via chargebacks. “
Mortaza Tollo
Many chargeback frauds relating to cryptocurrency have not been reversed, letting scammers get away with stealing cryptocurrency. Mortaza Tollo believes that the reason is because Australian banks have notoriously been against cryptocurrency. Thus, they would often side with the scammer and reverse the payment they made to the innocent seller.
Elbaite’s CEO wanted a solution to this problem and thus created the Elbaite trading model. This model protects sellers from incurring chargebacks and protects buyers from cryptocurrency centralised hacks.
How do I reduce or avoid chargebacks?
For a cryptocurrency trader; namely sellers, they must choose carefully who they sell their cryptocurrency to and the method in which they receive the funds. A cryptocurrency transaction cannot be reversed but a fiat transaction can be reversed with the help of the banking system’s chargeback.
Elbaite has created a solution to the problem for cautious sellers and prior victims of chargeback fraud. In the Elbaite model, the buyer will send the money to the Elbaite bank account first – not the buyer’s bank account. Then the seller of the cryptocurrency is notified to send the cryptocurrency directly to the buyer’s cryptocurrency wallet. The buyer will then receive their funds from the Elbaite escrow account. This means that Elbaite’s escrow is the intermediary in this transaction. This protects the seller from a chargeback. Thus, selling cryptocurrency on Elbaite is the most effective protection against chargeback fraud.
Sell cryptocurrency safely and for free on Elbaite.
