Escrow Transaction

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In General

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Escrow Process:

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• 1. Create an account / transaction with Escrow Agent

• 2. Both parties agree to procedures / conditions

• 3. Buyer deposits funds in Escrow account

• 4. Seller sends Bitcoin to Escrow wallet

• 5. Bitcoin is sent to Buyer

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Option 1

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• 1. Parties agree on the Terms of the Transaction and execute a Sale and Purchase Agreement (SPA)

• Buyer and Seller sign a Letter of Agreement or SPA with details of the agreed transaction. After vetting POF and POC, IMFPA to be signed by all parties (50/50 split)

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• 2. Buyer, Seller and Escrow Agent execute an Escrow Deed

• Buyer, Seller and the Escrow agent sign Escrow agreement

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• 3. Buyer Transfers Funds into the Escrow Account

• Buyer deposits funds to nominated Escrow agency

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• 4. Seller Transfers BTC to Escrow Agency

• Seller transfers BTC to nominated Escrow agency

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• 5. Escrow Agent confirms receipt of funds and coins

• Escrow Lawyers analysed, confirmed funds, coins and cleared history. Escrow agent provide evidence to parties. 

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• 6. Escrow Agency Transfers Funds to Seller

• Funds in Escrow transferred to Seller's Bank Account

 

• 7. Escrow  Agency Transfers BTC to Buyer

• Seller confirmed receipt of funds, lawyers transfer Seller's BTC to Buyer's private Wallet

 

• 8. Escrow Transfers Funds to Brokers

• Escrow distributes commissions to brokers, dealers and mandates etc.

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Option 2

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• 1. Parties agree on the Terms of the Transaction and execute a Sale and Purchase Agreement

• Buyer and Seller sign a Letter of Agreement or SPA with details of the transaction. After vetting POF and POC, IMFPA to be signed by all parties (50/50 split)

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• 2. Buyer, Seller and Escrow Agent execute an Escrow Deed

• Buyer, Seller and the Escrow agent sign Escrow agreement

 

• 3. Buyer Deposits Funds into the Escrow Account

• Buyer transfers funds to nominated Escrow agent

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• 4. Escrow Agent confirms receipt of funds

• Escrow Lawyers analysed, confirmed funds, coins and cleared history. Escrow agent provide evidence to parties. 

 

• 5. Seller transfers Bitcoin to the Buyer

• Seller sends bitcoin to Buyer's wallet

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• 6. Escrow Agent Releases the Funds to the Seller

• Seller confirmed receipt of funds, lawyers transfer Seller's BTC to Buyer's private Wallet

 

• 7. Escrow Agent Transfers Funds to Brokers

• Escrow distributes commissions to brokers, dealers and mandates etc.

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Option 3

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• 1. Parties Sign Letter Of Agreement / Sales and Purchase Agreement (SPA) and IMFPA

• Buyer and Seller sign a Letter of Agreement or SPA with final details of the transaction. After vetting POF and POC, IMFPA to be signed by all parties (50/50 split)

 

• 2. Buyer Transfers Funds to Escrow

• Buyer transmits funds to nominated Escrow agency. Once the funds received, Escrow agency will authorise Seller to initiate BTC transfer.

 

• 3. Seller Transfers BTC to Buyer

• Seller transmits BTC to Buyer and confirms with Escrow agency for validation. Escrow agency will validate with Buyer, and authorise Buyer's funds to be transferred from Escrow to Seller.

 

• 4. Escrow Transfers Funds to Seller and Brokers

• Escrow company transmits funds to Seller, less fees, discounts and commissions. Escrow distributes funds or commissions to brokers, dealers and mandates etc.

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Procedures To Avoid Scams:

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• Satoshi test - Wallet A to wallet B test - medium

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• Seller works with bank to bank procedure stated in the contract. Seller is not working on MT103/72, MT799 or MT760 procedures. It is not negotiable.

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• Non-existent conditional swift or improperly 103/202 (Source: Aldo-Link)

• How the misuse of SWIFT MT 202 is fuelling financial crime - Calert

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• MT199 is now necessary to send from buyer ́s bank to seller ́s bank to confirm buyer ́s availability of funds

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• Seller got scammed before, that ́s why for example the MT199 is now necessary to send from buyer ́s bank to seller ́s bank to confirm buyer ́s availability of funds. The reason is, one buyer in the past did a proof of funds (POF) and he faked a bank website, where he logged in and showed balance of funds, which were visible but not real, because everything was fake. The buyer has sent money to the seller ́s bank account and after 24 hours the money was flashed out and disappeared. That ́s why the seller is now waiting until money is cleared and it will take max. 72 hours to clear the money in seller ́s bank to avoid being scammed in this way again. 

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• 100K BTC : The minimum tranche size is 5,000 BTC. Our seller is a wholesaler having no intention to make deals with small amounts anymore. In the past, buyer ́s signed a contract for 100k BTC and got a big discount. Once they started with a 50 BTC trial, they were very happy to get a big discount and then the buyer ́s disappeared. The discount was stated for 100k BTC and not for 50 BTC. The seller decided then to start only with a minimum tranche of 5,000 BTC. It is not negotiable.

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• RECOMMENDED PROCEDURE :

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1.  Seller sends a draft SPA. Within 24 hours, buyer will fill out with buyer´s required details, SIGN and return the SPA to the seller. Within 24 hours, seller will fill out all required details, SIGN and send back the SIGNED SPA on a PDF format.

2. A video call is made between buyer and seller. Proof of funds (POF) and proof of coins (POC) will be exchanged during the video identity verification by the buyer and the seller as follows:

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• Identity: Original Passport must be presented on video by both parties. Seller will ask for additional ID if necessary.

• Wallet: Buyer´s receiving wallet will be submitted privately to the seller.

• Proof of funds (POF): Buyer has to login to his/her bank account to show the proof of funds (POF).

• Proof of coins (POC): Seller will play the recorded proof of coins video (POC) with personalized code given by the buyer. (No Satoshi or A-B wallet test available).

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1.  Buyer´s Bank Officer will initiate an MT199 communication to seller´s bank, informing the bank of the upcoming transfer with stated exact date of the transaction.

2. Upon the confirmation of the seller´s Bank Officer, seller issues the invoice and buyer pays the agreed amount of BTC using MT103 Cash Wire Transfer, or Telegraphic Transfer {TT}. Then provide the official bank slip to the seller.

3. Upon the confirmation of the seller´s designated bank of the confirmed clear receipt of payment to the seller (it takes 72 hours), the seller will release the agreed amount of the BTC to the buyer´s wallet, and then the seller will send the screenshot to the buyer as proof showing that the BTC has been sent.

4. Buyer has to wait until the six {6} confirmation has been achieved and the Bitcoin {BTC} is finally sitting in buyer´s receiving wallet. Buyer will make it known to the seller by providing the screenshot of the confirmed complete transfer.

5. Seller pays commission to all involved parties according to the annexed IMFPA-[Insert Code……], and move to the next tranche until contract is exhausted.

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Procedures for Satoshi Test:

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• “OTC desks demand proof of coin or proof of funds before trading.” - This was popularized by scammers and hackers as a method of identifying potential targets. Reputable OTC desks would never provide this as it would deanonymize  their clients’ wallets. Nor will they ever request private financial information that wasn’t strictly necessary for the trade at hand. - Hackernoon 

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" Over the past six months, we can not remember a single seller who would be willing to show to the whole world the contents of his wallet. Moreover, we can be 100% certain that this will never be the case. "

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" And now imagine this scenario: a fake buyer shows up, requests a Satoshi test and, while also pretending to be a seller in a different transaction, passes it on to his own buyer. His gullible buyer sends the money to the fraudster and when the coins fail to arrive, contacts the police. And now your bitcoins are involved in a police investigation. " - CatchBitcoin

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Problems:

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1. Fake Buyer asks the seller to send him a satoshi, pretending that there is indeed a buyer who is ready to move funds into escrow etc. The truth is that he has no buyer yet! After getting the Satoshi, the middleman is starting to look for a real buyer, 

2. Seller or group of sellers will not put all of their bitcoin in one of their addresses. The process of uniting bitcoins from different addresses to one address is time-consuming.

3. Some bitcoin wallets containing an enormous amount of coins being deposit at the seller's trustee office safe box, so accessing them does require some procedure which again takes time.

4. Some buyers are fake and only try to get info about real sellers in order to try to steal their coins or use these details to steal others money. When the seller sends a satoshi it does prove to the buyer that the seller really holds the coins... so we might "whatever". Blackmail - some buyers are fake and can try something criminal in order to get possession of the coins, harassing the seller, kidnap for ransom purpose and so on. Hacking and Phishing etc.

5. Fake documents KYC, LOI, POF provided by Buyer. We can presume his real intentions were to try to resell the BTC to another buyer or simply to try to steal this other person's money by convincing him that he holds those BTC.

(Source: steemit )

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​Before  Satoshi Test, Buyer Needs To Provide: 

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1. Info from the buyer (KYC, LOI, POF)

2. Copy of CIS (client information sheet=information on the buyer’s company),

3. Buyer’s passport,

4. Confirmation that he’s the account manager (a resolution on his appointment),

5. And a bank statement with the bank officer’s contact details. 

6. Sign SPA contract

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Once documents provided by Buyer and sign SPA contract, Seller can go ahead with the Satoshi test and prepare the deal.

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Suggestion to buyers: 

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1. Do not waste time, be ready to submit all documents, forget Photoshop, and be patient and polite.

2. The market is on the seller’s side.

3. The time is on the seller’s side.

4. The fact is that you will have to work to convince the seller.

5. Sadly, this is not the situation where the “buyer is always right” applies.

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A suggestion for middlemen and agents: 

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1. Copy the above arguments from the Buyers and send them to us

2. If they’re for real, they will definitely come back.

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Source: CatchBitcoin

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