Selling BTC for fiat
I am sure that many of you are selling BTC for fiat. This is first thing i have to point out is: that is not quite good because it’s more likely for fiat to decrease its value than for bitcoin. Bitcoin infact, for its structure (fixed amount and independency from intermediaries) it’s likely to increase value as soon as all the bitcoin possible are mined. But okay many of you are selling bitcoin for fiat. For such a conversion you have to pay great attention to your transaction for the following reasons:
Risks you will face
- bitcoin transactions are final and irreversible. Therefore you cannot have back bitcoins after a transfer out transaction. it’s not possible;
- fiat transaction instead are reversible. Infact someone who pays you, can always ask to his bank to revert the transaction and ask money back (charge back). Yes charging back for a good or a service you have already had is illegal, but… ;
- there are intermediaries other than banks, which makes charge back execution even more simple, like paypal and similar services;
The above points are very important and should never be underestimated. Infact it’s possible that you sell bitcoin for fiat, being paid in eur or usd by paypal, send the BTC to the client and then the client asks to paypal to charge back the transaction. In this way you will lose the bitcoins (since you cannot revert a bitcoin transaction) and lose also the payment from paypal.
What intermediary can do and normally does
Infact paypal is very very risky for the seller. When a client asks for a charge back, normally paypal does not check the legitimacy of the request, and simply charge back the transaction. So you lose the money. Why paypal does not check if the request is legitimate? We really dont know but since they behave in such a way, never use paypal for such a sell or any other similar services.
Paypal is also absolutely not recommended for any sale. Infact paypal seems not to follow any regulation about management of account and feels always free to do the following (here below a list of things really happened to people selling and trying to get payments on paypal):
- charge back money to client without any check even if you can proof that you executed the service for the client of you sent the goods to the client;
- freeze your money for any reason for months: for example they decide you must give them a document (whatever) and they block your account in the meantime even for months. Or they decide you do a business they don’t understand, so they block you account indefinitely. It’s easy;
- close you account unilaterally and therefore maintain freeze your money inside it for 6 months or more;
Is this legitimate?
You are wondering if they can legally do that. I cannot say this, i am not a lawyer. But what i actually know that in Switzerland for example, money can be freeze in a bank account by Police for 5 days only. Longer periods must be decided by judiciary authority with a decree. Banks cannot do this without such a public attorney decision. For these reason it’s likely to suppose they couldnt.
Recommendation is to avoid paypal as a way to be paid.