Escrow refers to the cryptocurrency being held by LocalCoinSwap or secured on a blockchain on behalf of the buyer and seller while the trade is being completed.
So how does this work in a practical sense? It is relatively simple:
- Two users agree to trade with each other. One user is buying cryptocurrency (crypto) from a seller.
- The seller “funds escrow” (locks their crypto into escrow).
- The seller provides the local currency payment details and the buyer pays the seller directly. This may be through a variety of payment methods including bank transfer, cash deposit, Western Union, and more.
- Once the seller receives the local currency, they release the crypto from escrow to the buyer
This process provides a secure way for users to buy and sell with a significantly reduced risk of fraud.
Once escrow has been funded, the seller cannot withdraw their money from escrow. So the buyer can be sure that if they make the correct payment, they will receive the crypto.
If the buyer does not make the correct payment or the seller doesn't release after receiving payment, either trader can “raise a dispute” and a LocalCoinSwap staff member will investigate and release the crypto to the correct trader.
Comments
11 comments
What if the seller want to crook you from your money or if he or she decide not to send you your coins you want to buy
@liptonmcrain This is why you should only trade with escrow. The seller locks the crypto being sold into escrow and it is held securely there while the buyer makes the payment.
If the seller does not release the crypto from escrow to the buyer once they have received the payment then the buyer can raise a dispute and a LocalCoinSwap dispute resolution manager can release the coins to the buyer manually.
Seller need to open an escrow account or it will processed automatically by this site?
Hi @Mithun,
Neither traders need to open any additional escrow account.
Once 2 users agree to trade, the seller will see a "Fund Escrow" button on the trade page. They click this and the crypto is automatically locked in escrow.
Once the seller receives the payment, they release the crypto from escrow to the buyer.
Please, is it possible for a seller not to see “fund escrow” on a trade page and if yes what conditions can that happen?
Hi @Jonsnow099
Once the trade is accepted the seller will see the "Fund Escrow" button.
They will not see the "Fund Escrow" button at certain stages throughout the stage (as it is not necessary). For example:
How does a buyer get proof of payment for a cash in person transaction?
how does one prove if the seller even receives the payment or a merchant giftcard transaction? example: say im trading my gamestop gift card to the seller for btc, the seller gets the whatever funds in the gamestop card then seller wont release funds because he or she can just say i couldnt get or there wasnt any funds in the gift card (the seller is obviously being untruthful here in this scenario) how does localcoinswap resolve this...? feels like this might be a million dollar question here lol im sure LCS dealt with this example thousands of times since the opening of the site.
Please I need a factual response; Is it possible for seller escrow account marked approved and not marked on the buyer dashboard so as to proceed in paying seller account?
bakers
How can you know that the seller has fund the escrow
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