The peer-to-peer cryptocurrency trading platform LocalBitcoins has come under fire recently for several reasons, including not enforcing mandatory financial reporting requirements. It tried to recover earlier this year by introducing new anti-money laundering rules for European customers, but those efforts may have come too late. It now appears that the Helsinki-based platform is removing the ability to buy or sell digital currencies in person for cash.
According to a Reddit post from this past Sunday, a user of the service noted that the cash-for-crypto option was no longer available. The move, which could be limited to only the United States, based on comments in the thread, would bar users from trading their assets for cash. Other comments in the thread indicate that pending trades on the platform have already been canceled. One Reddit user asserted, “It’s time to no longer recommend LocalBitcoins, EVER.”
LocalBitcoins has not made any public comment on the news, at the time of this article, which is never a good sign. If the decision had legitimate reasons or the company felt it could justify the move, it should have been the first to let everyone know. Absent an official statement, there is reason to suspect that the platform may be seeing the first signs of faltering.
The service has come under increased scrutiny around the world, with Finnish regulators beginning to oversee its operations. In the U.S., several traders have been arrested, and jailed, for operating a money transmitting service without a license. This could have been the impetus behind the silent move to ban in-person transactions.
LocalEthereum, in response to the LocalBitcoins news, has announced that it will remove trading fees for in-person cash deals. The rival trading platform’s fee suspension is only temporary, running from June 1 to July 1, but is going to help it pick up a lot of new customers. In a blog post on the subject, it states, “Meeting in person is one of the oldest ways to exchange between crypto and fiat, and it remains one of the safest. As long as you follow simple guidelines, it’s incredibly rare for anything to go wrong. This is because cash, like [Ether] and [Bitcoin Core], is irreversible.
“When trading with cash, we recommend meeting in a public place such as a cafe. If safety is a greater concern in your area, try an international airport or bank branch — somewhere with cameras and security to keep you safe.”
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