🤔FAQ UPI
Frequently Asked Questions for our UPI integration 🪷
How does ZKP2P address the "Bank account freezing" issue?
Bank accounts are frozen because of the following two reasons:
Impersonation Fraud 🎭
Impersonation fraud in peer-to-peer (P2P) cryptocurrency transactions typically unfolds through these steps:
Setting Up Fake Buyer Profiles: Scammers create fraudulent buyer accounts to initiate transactions with sellers of cryptocurrency.
Gathering Seller's Banking Information: These fake buyers acquire banking details from the cryptocurrency seller, usually as part of the transaction process.
Involving an Unaware Third Party: The scammer locates an unsuspecting individual and persuades them to transfer money to the seller's bank account, often under a false pretext.
Misguided Transactions by the Seller: Believing they have received a valid payment, the seller transfers the cryptocurrency to the scammer's account.
Realization and Reporting of Fraud: The third party, upon realizing the deceit, reports the fraudulent activity to the cybercrime authorities.
Collateral Damage to the Innocent Seller: As a consequence of the report, the seller's bank account may be frozen by the authorities, and they could receive a legal notice, despite being an unintentional part of the scam.
How does ZKP2P address impersonation fraud?
For On-rampers: As a buyer on ZKP2P, you are not impacted by impersonation fraud. This type of fraud primarily targets sellers, so as a buyer, your transactions are secure from such risks.
For Off-rampers (LPs):
Impersonation fraud is difficult to execute on ZKP2P. We verify that the receiver of the HDFC payment notification email matches the registered user. This means the fraudster has to obtain an old email from the naive third party to register, make them do a payment, and then again obtain the payment email to generate the proof of payment and unlock the USDC. These three steps are difficult to execute and would raise suspicions from the naive third party, thus reducing the chances of impersonation fraud.
We have also implemented safeguards for sellers in the form of transaction limits. Each buyer is restricted to transactions up to $100 USDC with a maximum of two transactions per day. This measure is designed to deter potential fraudsters, making the platform less attractive for conducting fraudulent activities.
This is not a completely solvable problem, but by adding more layers such as privacy-preserving ZK-KYC and access controls to restrict trading to a verified and trusted community, we would further decrease the chances of any potential fraud on our platform.
Chargeback Fraud 👺
This happens when a buyer, after receiving cryptocurrency and sending fiat currency (like INR) to the seller, falsely claims they were tricked into the transaction. They report this to the cybercell, leading to the possible freezing of the seller's bank account due to the alleged deception.
How does ZKP2P address chargeback fraud?
For On-rampers: On ZKP2P, buyers are not affected by chargeback fraud. This type of fraud typically targets sellers, so as a buyer, your transactions are secure from such risks.
For Off-rampers:
UPI transactions are not reversible. So the buyer would have to go to great lengths to file that complaint. Given that the current limit is 100 USDC, it would be cost-ineffective for the buyer to perform this fraud.
Considering that the buyer needs to register, signal an intent, perform the transaction, and then prove it, the seller can claim that they weren't tricked into the transaction but instead were aware of what they were doing.
Adding more layers of protection, such as privacy-preserving ZK-KYC, and implementing access controls to restrict trading to a verified and trusted community, we would further decrease the chances of any potential fraud on our platform.
When can I place P2P orders on ZKP2P?
You can place orders on ZKP2P 24x7. Our platform is designed for continuous operation, allowing you to initiate transactions at any time. The counterparty does not need to be online for you to proceed. Once you've made a payment and generated a proof of payment, the assets are unlocked and the transaction can proceed, regardless of the time of day.
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