LocalBitcoins, the world’s oldest and largest peer-to-peer Bitcoin marketplace, has announced that it will be stopping its trading services, citing the difficult crypto environment.
“We are sad to share that, regardless of our efforts to overcome challenges during the ongoing very cold crypto winter, we have regretfully concluded that LocalBitcoins can no longer provide its Bitcoin trading service,” the company said while asking customers to withdraw their funds as soon as possible.
“We encourage all customers to withdraw their funds from LocalBitcoins and we ask you to proceed with withdrawing the Bitcoins from your LocalBitcoins wallet. You have 12 months to withdraw, however of course, we encourage you to proceed withdrawing sooner.”
Timeline for discontinuing the Bitcoin trading service:
- 2023-02-09: Suspension of new sign ups
- Suspension of trading on LocalBitcoins
- Suspension of using LocalBitcoins wallet (with exception of withdrawing one’s funds)
- After 2023-02-17: LocalBitcoins customers will only be able to log-in to withdraw their Bitcoins. The trading and wallet services will no longer be available at this point
LocalBitcoins, which was founded in 2012, has been a pioneer in providing a platform for bitcoin trading in emerging markets. It had estbalished a large lead over competitors such as Paxful and Binance P2P in the peer-to-peer trading space in emerging markets like Africa, Latin America and Russia, for example.
According to U.S authorities, Localbitcoins was one of the major bitcoin transferrers to Bitzlato, which was shut down by the US Financial Crimes Enforcement Network for allegedly being a huge conduit for money laundry and other cybercrimes. The US authorities also accused Bitzlato of assisting in bypassing sanctions against Russia.
However, Localbitcoins denied any collaboration or relationship with the besieged exchange while indicating that the P2P company had been regulated by the Finnish Financial Supervisory Authority since 2019 and strictly followed Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
According to Jukka Blomberg, Chief Marketing Officer at LocalBitcoins:
“Based on our data, there have practically been no transactions between LocalBitcoins and Bitzlato since October 2022 after we stopped serving Russian user accounts and accounts of users residing in Russia.”
Localbitcoins recorded some of its best trading performances before the crypto boom in 2017 but activity has been declining since, according to data above from Coin Dance.
Weekly trading volumes dropped below 1,000 BTC by February 2021, and the latest reported weekly trading volume was 283 BTC, equivalent to around $6 million.
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