16 ms·

LocalBitcoins will discontinue its service

266 points by madacol 4y ago

ovi256 4y ago
The shutdown announcement says the shutdown was caused by "challenges during the ongoing very cold crypto-winter". Wish we had more details about that. Did the ongoing winter reduce income to make the service unprofitable ?
- moffkalast 4y ago
  Reading between the lines: "We've made some risky investments as a side deal that REALLY didn't pan out."
  - ErikHuisman 4y ago
    Yield farming client funds?
    - shp0ngle 4y ago
      Nah they had very little of that actually available. They were not operating like a big crypto exchange.
  - im3w1l 4y ago
    What makes you say that? They are shutting down in a responsible and orderly fashion, so I'm willing to take it at face value that they just aren't profitable anymore.
    - moffkalast 4y ago
      That's likely also the case, but I would at the very least expect a crypto exchange company to keep all their reserves in crypto, which has now completely plummeted in value. Localbitcoins are a bit different than the typical exchange so their exposure is likely less, but if you look at Binance or Robinhood they're all gambling with their backing money like a drunk at the horse races.
- joyfylbanana 4y ago
  Their volumes have been getting smaller and smaller throughout the years. Likely reason is that the service just isn't profitable any more. Their volumes are public: https://coin.dance/volume/localbitcoins https://coin.dance/volume/localbitcoins These days there are lots of services offering p2p trading, and big exchanges like Binance also have p2p trading services for multiple cryptocurrencies. I would guess that Binance p2p volume alone is likely many times of that from LocalBitcoins these days. Most players don't publish their volumes though.
  - unixhero 4y ago
    Thanks you for sharing the volumes link. Fascinating to say the least.
plantain 4y ago
I assume they've succumbed to law enforcement / money laundering pressures...
- ABeeSea 4y ago
  Probably because of all the obvious money laundering.
  - luckylion 4y ago
    Were people making significant transactions through localbitcoins? Are there people trying to launder $100? Are there people using some online-marketplace if they're trying to launder $1000000 and meet random people to make that kind of transaction?
    - bflesch 4y ago
      Don't be naive. LocalMonero / LocalBitcoin is prime way to launder cash for organized crime. A thousand dollar here, a thousand dollar there, then you have converted your money to crypto.
      - luckylion 4y ago
        A thousand dollars here and there doesn't get you anywhere. And really, you'd have lots of risk -- if money laundering was the primary application, the police would surely join the fun, and if you're not meeting a cop, there's a good chance you're meeting a robber that knows you'll be arriving with lots of cash. But the amounts really don't make sense. Organized crime is certainly not running around making $1000 deals all day with different people to somehow launder money by converting it into bitcoin and back ("I found this bitcoin on a sidewalk on the internet and I've exchanged it for cash, so now this cash is legal?").
        nikanj 4y ago
        I have drugs. I want cash. You have cash. You want drugs. You go on localbitcoins and trade your cash for bitcoin (fully legal) and then buy drugs from me via darkweb (fully anonymous). I sell you the drugs on darkweb (fully anonymous) and then offload my bitcoin on localbitcoin for cash (fully legal). This removes a lot of risk for both parties This is the original business model, but the authorities caught on pretty quickly and implemented all of those pesky KYC/AML requirements.
mteam88 4y ago
Right below the announcement is: new mobile app available! I wonder how that happened...
londons_explore 4y ago
I wonder what will happen to any unwithdrawn user funds after those 12 months? Localbitcoins has been around for a long time. I bet there are lots of wallets on there totally forgotten about with lots of bitcoins in. Quite a goldmine for someone...
- enlyth 4y ago
  If I remember correctly their website already had disclaimers not to keep money in their wallets long term because it's meant for temporary storage only, and they charged interest on any funds just sitting there to discourage people from doing it.
meerita 4y ago
I'm surprised that they attribute the decline in their performance to the "crypto winter". It seems like the success of a business should not solely depend on market conditions, but also on their ability to maintain profitability even during market downturns. It raises concerns about the sustainability of their operations unless the market is bullish.
- UncleEntity 4y ago
  > It raises concerns about the sustainability of their operations unless the market is bullish. They are literally announcing they are shutting down which should raise concerns about the sustainability of their operations one would think. —edit— I can’t resist… Jesus Fuck, dude, it’s in the title!
- ur-whale 4y ago
  > It seems like the success of a business should not solely depend on market conditions Please list businesses whose success do not depend on market conditions.
  - donkeyd 4y ago
    Tobacco companies. No matter what happens, they just seem to be making more money.
  - cj 4y ago
    You could ask the opposite question as well: "Please list businesses whose success depends on frothy, bullish market conditions" Most companies can be successful even in down markets. See basically all S&P 500 companies. Yes their stock price might be down and they may be laying people off to save money, but those are all legitimate and successful businesses by most measures.
  - dale_glass 4y ago
    Theoretically, localbitcoins should be very insensitive to the bitcoin markets, because for them it doesn't matter much what the price is -- they just facilitate transactions. If transactions are still happening, regardless of the BTC price, there has to be a way to make money from facilitating them. And given that BTC has been running with full blocks for years, the transactions should be there. Plus, it's existed for a long time, so at this point the service has been built. If business is slow then it can just coast on what already exists. Of course it could indicate that nobody actually uses BTC that way anymore, and the current transactions are of a different nature than localbitcoins was made for.
AstixAndBelix 4y ago
Can someone tell me about what actually happened? Do they really need that much infra to simply allow people to meet in person and exchange money?
- joyfylbanana 4y ago
  LocalBitcoins stopped providing the "in-person" model years ago. Also it really wasn't a business for them as people don't need the escrow service for that. They became regulated, implementing all KYC and AML stuff and I guess that drove customers away to other venues. Binance P2P seems to be the most active these days. In-person trading has been replaced with Bitcoin ATM's I would guess.
loxdalen 4y ago
Any more info on this? No info on their twitter or instagram, no news sources reporting on it. I can't really see what the reason could be except legal.
ddtaylor 4y ago
FWIW LocalBitcoins has been virtually unused for a very long time by anyone wanting to do local crypto swaps. There are instead much better non-custodial services that still accomplish the same goals (locking/escrow, reputation, arbitration, etc.) without the same risks.
- anonymoushn 4y ago
  What services?
  - matthews2 4y ago
    LocalMonero is nice, and reasonably active in quite a few countries.
  - Geee 4y ago
    https://bisq.network https://bisq.network https://hodlhodl.com https://hodlhodl.com https://www.peachbitcoin.com https://www.peachbitcoin.com There might be more, which I'm not aware of.
sph 4y ago
This smells suspiciously like they are having legal issues. Sad to see them go, during a hard time a decade ago I exchanged some Bitcoin change I had through their platform to make rent. Easy, anonymous and straight to my UK bank account. I haven't kept up with the KYC laws, but no doubt it is not possible to exchange Bitcoin as if it were cash anymore. Thankfully the new digital pound currency will revive the (black) market for Bitcoin & co. in a scale not yet seen before.
sammy2255 4y ago
Lol.. “Mobile app now available”
olalonde 4y ago
The official reason, "crypto-winter", seems like bullshit to me. LocalBitcoins started in 2012 when volume was way lower and price was under 100$. Seems more likely that they were pressured into shutting down.
- m00dy 4y ago
  exactly. LocalBitcoins used to work great in Europe and Thailand from the first person experience.
  - bflesch 4y ago
    AFAIK it was basically forbidden in Germany after some point.
    - m00dy 4y ago
      I will cash out some this easter in Berlin and I have done it previously.
- capableweb 4y ago
  Their own expenses was probably way lower before, and as the platform gained popularity, so did their expenses. Once revenue started going down after the peak ~2017, probably their expenses were harder to reduce and so the platform was harder to keep running.
- fallingknife 4y ago
  Absolutely they were pressured. They could not be shut down legally through the courts. It is legal to buy and sell bitcoin. It is legal to provide a platform for people to meet up and do legal business. Basically it's Craigslist.
  - flangola7 4y ago
    So who had leverage to pressure them?
Olphs 4y ago
25 million in profit with 22 million in turnover last year. Not sure how that works exactly, but seems like money wasn't an issue at least. This is all publicly available since the company behind it, is based in Finland
- donkeyd 4y ago
  > Not sure how that works exactly My gusss is: If they take a cut in crypto and that crypto increases in value, that increase wouldn't be turnover but it would be profit?
  - miohtama 4y ago
    Correct. Capital gains is profit.
- sh4rks 4y ago
  Further down, I'm reading comments saying that they did shut down because of a lack of profitability. So which one is it?
  - nikanj 4y ago
    Selling assets pumps up the bottom line, but if that's your only source of income, you're better off just liquidating the company and cutting the losses
  - joyfylbanana 4y ago
    Looking at the downward trend in volumes, I suspect the profits come from the results of selling their bitcoins they have been holding in the balance sheet, the service itself is unprofitable.
- nikanj 4y ago
  They held a ton of cryptos they got when BTC was $verylittle, and have been slowly selling to cover expenses?
Stagnant 4y ago
Very weird and surprising to hear, the company had been making very nice profits for years[1]. Looks like they went from 59 -> 134 employees between 2020 and 2021. They started requiring KYC from everyone trading on the platform fairly recently, maybe it had bigger effects than they anticipated? I can see why people wouldn't be too keen on KYC in a platform for peer to peer trading. 1: https://vainu.io/company/localbitcoins-oy-taloustiedot-ja-liikevaihto/823740938/yritystiedot https://vainu.io/company/localbitcoins-oy-taloustiedot-ja-li...
- TEP_Kim_Il_Sung 4y ago
  That's why you meet them in person: Have a chat, over some tea, get to know them. Then you KYC, and trade.
- trompetenaccoun 4y ago
  My guess is all the companies dealing in crypto that aren't properly licensed and aren't well connected politically are going to be in legal trouble soon. Makes sense for them to quit while they're still up, the business model has no way of standing long term. Probably smarter to take their money and just buy Coinbase stock or something like that. The fact that they introduced KYC speaks for itself, because what's the point of using localbitcoin when you need to go through KYC? The whole idea was that it's anonymous p2p trade. If they require KYC too, users might as well go to one of the proper exchanges and get a better deal. Plus all the other services like staking or NFT markets on top.
noduerme 4y ago
Awwwww... The original "meet in person" model was so good. All the bank transfers, paypal, etc. never made any sense. Just a shout out to LocalBitcoins. When I was living in Argentina during the almost-hyperinflation of 2014 or so, I got all of my living cash in pesos and USD by selling BTC to local traders who I met on Localbitcoins.com. Usually I would meet them in a coffeeshop, have a coffee, wave my phone and transfer some BTC and they would hand me an envelope with $1000 USD and ARS$9000 that would cover my rent and food for the next month. The cost was +5% for the BTC-to-cash trade, but the exchange rate was "blue" meaning, at the time, one peso was officially worth $0.33 but the blue market had it trading at somewhere closer to $0.06... and trading for BTC got you the live blue rate. One kid I dealt with a lot had a wonderful business model. He was a math student at the university and opened an office buying and selling Bitcoin. When I asked him where he got all this USD cash which was almost impossible to find in Argentina, he explained: People gave it to him. Argentines who got 20% of their paycheck in dollars, or who had dollars stuffed under their mattresses that they couldn't get out of the country. They paid him 5% to move it out. He took their cash and sold it to people like me - expats, tourists - for BTC, and sent the BTC to his partner in Miami, who changed it out to USD and put it into American bank accounts for them. So he got 5% on either side of the trade. This was the moment, around 2013 or so, when I really believed BTC would be a unit of exchange that would break the artificial currencies around the world and serve as a leveler that would allow anyone with skill to work anywhere and go anywhere; it would demolish the old sclerotic monetary regimes. Then it got regulated [edit: all its endpoints got pwnd], and Localbitcoins has not for a long time shown any P2P meetups for unregistered, silent trading-for-cash. That was its original purpose, and it served very well at the time. In loving memory.
- rvnx 4y ago
  Curious there, from what I understand, it seems like Localbitcoins is in general a place where you can buy Bitcoins for cheaper (19K instead of 21K). Which sounds a bit too good to be true. Could it be because it is Bitcoins collected from crime or ransomware, or just illegally exchanged ? Otherwise, why would someone sell Bitcoins cheaper if you pay them cash ?
  - 4y ago
josh2600 4y ago
I bought my first bitcoins using local bitcoins many many years ago, must’ve been around a decade at this point. A guy showed up to a location with a duffel bag and a handgun. I put some money into a bag and gave him a public key. We sat there for about 20 minutes and chitchatted while we waited for the BTC to arrive in my wallet. All you kids with your fancy exchanges and dexes these days!
- smcl 4y ago
  You're braver than me. If a stranger who knows I have cash on me shows up with a gun, I'm bailing.
  - rattlesnakedave 4y ago
    The key is to bring your own gun.
    - smcl 4y ago
      I think I'd rather have a gunless transaction altogether :D
      - rationalist 4y ago
        You would be just as vulnerable, except without the protection of Mutually Assured Destruction — just whomever is stronger wins if it goes sideways.
        smcl 4y ago
        Yeah, but I don’t want to be in a situation where “mutually assured destruction” is even a thing. I live in a country where I could get a license and get a gun, I’ve never felt the need to as it’s continually safer year after year. If I meet someone here who feels the need to arm themselves for safety in public, I am assuming that person is a little unhinged and that getting involved with them has the potential for trouble. This may be locale-specific though, it could be a totally normal thing to walk around with a gun elsewhere.
jjoe 4y ago
This could be part of the Bitzlato crackdown [0]. Localbitcoins was referenced as one of the top counterparties. *...Similarly, Bitzlato’s top three sending counterparties, by total amount of BTC sent between May 2018 and September 2022 were (1) Hydra; (2) Local Bitcoins, a VASP based/incorporated in Finland; and (3) “TheFiniko.”* [0] https://www.fincen.gov/sites/default/files/shared/Order_Bitzlato_FINAL%20508.pdf https://www.fincen.gov/sites/default/files/shared/Order_Bitz...
domatic1 4y ago
You can see here their finances https://www.asiakastieto.fi/yritykset/fi/localbitcoins-oy/28554152/taloustiedot https://www.asiakastieto.fi/yritykset/fi/localbitcoins-oy/28...
throwntoday 4y ago
Was this site ever compromised? I used to flip BTC on here back in 2013 when coinbase would front me up to 20BTC before my ACH even settled. I had a repeat customer who got his bitcoin stolen and thought I did it. I tried to explain the blockchain to him and how I clearly sent it but it wasn't getting through to him. He sent me a few death threats but never heard from him after that. Another guy bought around 20BTC from me cause he was convinced someone in Florida was gonna sell him bitcoin miners which were really tough to get at the time. I told him it was probably a scam and he should fly out instead of blindly sending the money first. He didn't listen and about 30min after we met he called me back and said the guy wasn't answering the phone anymore. I concluded pretty early on that bitcoin was not a viable currency.
- birracerveza 4y ago
  I remember when I went grocery shopping, and a man robbed me at gunpoint. Another time someone busted in my home and stole all my money. And another time I fell victim to a scam! That's when I concluded that money is not a viable currency. :facepalm:
  - throwntoday 4y ago
    People need to understand transactions are irreversable. They can't seem to wrap their mind around that and it's not a prerequisite to using crypto. You can be as glib as you want but there's many reasons bitcoin has still failed to be useful as a day-to-day transactional currency; that being one.
    - birracerveza 4y ago
      Glib response to a glib comment. And there are many reasons bitcoin has still failed to die despite failing (in your opinion) to be useful as a day-to-day transactional currency; the fact that transactions are irreversible being one.
      - seanw444 4y ago
Andrew_nenakhov 4y ago
Everyone in crypto I knew were using them, and then just stopped. The lesson is: Know Your Customers, Localbitcoins.
subpixel 4y ago
I recall a chance to meet someone and buy BC at about a dollar that I dismissed as shady
rstarast 4y ago
Hah, memories. I bought my one and only bitcoin from some dude in Munich via localbitcoins back in ~2013. Two weeks later I got a phone call from some Munich police officer asking whether I too was a bank theft victim of that guy. I could explain a bit about what actually happened (police had no idea about bitcoin at the time). It turned out that some money had been stolen via online banking from Spanish bank accounts, and presumably laundered by turning it into bitcoin via my localbitcoins contact.
shp0ngle 4y ago
It was fun, but looking at their trading volumes, they became irrelevant. https://coin.dance/volume/localbitcoins https://coin.dance/volume/localbitcoins I tried to log into my old account, it seemed they locked it 2 years ago in some new KYC/AML logic, and I never bothered to fix that. I was an OG from 2014-ish. Ah well.
sincerely 4y ago
Wow. This is really the end of an era. Is there any other reliable way to exchange fiat for BTC without going through a KYC process now? And does it even matter if the exchanges have switched to Monero anyways?
- nikanj 4y ago
  You can get your own mining gear for fiat and get freshly minted BTC? Does not scale well for the low end though
- 3np 4y ago
  bisq. Agoradesk/localmonero.
anonymousDan 4y ago
Even in a developed country (UK), the KYC is so **ing annoying to use on most websites I have tried. Several times I have wasted an hour waving my passport in front of some poorly implemented image recognition page that failed to capture a photo and I just gave up. Would love if there was a flourishing ecosystem of local transfers without KYC. I wouldn't even mind if banks started providing physical KYC services. Maybe there is an opportunity for a company that focuses on providing KYC as a service such that you can just point each crypto exchange/custodian to that.
- ploppyploppy 4y ago
  Just did KYC for the Gemini app on my phone walking the corridors between the gym and the sauna at my local leisure centre. How are you having so much trouble?
  - stef25 4y ago
    It was a nightmare on Coinbase back in the day. I signed up with "Joe Sixpack" but my ID card had my full name "Joe Andrew Thomas Sixpack" - KYC check fails.
    - WelcomeShorty 4y ago
      Same here. They require real mail (ISP, water, gas bill) with the identical name on it as on my ID. That does not happen, no one sends me bills with my full name, just first and last. No Coinbase for me.
    - gotorazor 4y ago
      That's exactly how airline tickets work. You can't board a plane if the ticketed name don't match your ID name in full.
  - anonymousDan 4y ago
    Not sure, from memory one issue is my passport is from a different country than where I live. Several sites just could no handle this. Or maybe I just have a weird face :)
1970-01-01 4y ago
Wow, this feels like the beginning times all over again. At least there was a notice! Does anyone still barter for coins?
rmac 4y ago
I met a guy in a Hawaiian shirt at a coffee shop; I awkwardly laid out thousands of USD on the small table between us. We made small talk waiting for block confirmations. Thanks localbitcoins ♥
Roark66 4y ago
I wouldn't be surprised if they had trouble completely unrelated to crypto. I had to close up my mini bitcoin exchange business to and from UK pounds I started shortly before back in 2018 or so. I spent few weeks writing software to link with kraken, bittylicious and scrape online banking to have an automated way to exchange BTC for GBP using UK's faster payments. Although in theory faster payments could take up to a day within the same bank it was instant. So I opened a bunch of bank accounts (6 if I remember correctly, this covered all major banks - smaller banks usually were fronts of those larger anyway). And I could offer much better rates and much quicker settlement times than other sellers on the platform. I also had IP location based trust API integrated so I was reasonably safe from obvious scams. I was pretty happy when money started rolling in... (up to £2k per day in profit was my best).... Fast forward 2 weeks and every single bank account I opened was closed by the bank despite me personally talking to each branch manager telling them what I'm opening those accounts for and having their assurance it is fine. All the letters were the same. There was no instances of fraud etc that I worried the most about. Nope, none. All said they closed my accounts for "business reasons", or "chose to withdraw service for undisclosed reasons". When I pressed them about it in person no one would tell me why, other than one manager telling me my accounts were flagged by "profit team" and it had nothing to do with crypto. I suspect it costs(used to cost) the bank money to receive faster payments, but they are free to an account holder. On a good day I would get £35k in, all in £10~£20 payments and I guess the banks didn't like it... Most businesses that get incoming small transactions usually pay a lot for the privilege. Either to CC handling providers or others. All my incoming transfers were from individuals sending (free to them) bank transfer to me (free to receive). You can imagine I was quite unhappy with the result. I looked into what it would take to have a direct link with faster payments settlement office and it is only open to banks...(integration costs back then woukd start at £10mil) Remember those smaller banks that were only fronts for larger ones. Most likely this is one of the reasons. So in conclusion, crypto has its issues, but as long as I can send someone a tenner for pennies it will have my support. I have no idea why licalbitcoins failed, but I wouldn't be surprised if banking had something to do with it.
- pjc50 4y ago
  > All said they closed my accounts for "business reasons", or "chose to withdraw service for undisclosed reasons". I suspect this was the "you've tripped our money laundering rules in a way we're not allowed to tell you".
hmmm3 4y ago
I'm surprised no-one has mentioned BestChange as the go-to aggregator for cash <> crypto transactions, including most major cities in the US.
A6gYPfxNas 4y ago
RIP to the OG. Did my first transactions (in person, with cash, at a coffee shop) there. For anybody that still is looking for this type of service, check out AgoraDesk.
ViceCitySage 4y ago
Though I prefer Monero ($XMR) over Bitcoin, it's sad to see a non-KYC Bitcoin exchange go away. Luckily, LocalMonero isn't related to LocalBitcoins so that is still around.
tiahura 4y ago
So what is the best way to find someone local to buy BTC from with cash?
58x14 4y ago
I still have a few BTC in a LBC account from 2013. I had forgotten about it until a few years ago, and the email account I used was inaccessible. I have the 2FA backup codes sheet but nothing else. I wonder if they’ll let me recover them. I bought my first BTC through LBC. RIP, the end of an era.
denton-scratch 4y ago
Why are they terminating operations? The article doesn't say.
- victor22 4y ago
  Because they were forced to for sure, this is a state-level attack on bitcoin, this will hurt now but will speed up decentralized exchanges
  - denton-scratch 4y ago
    > they were forced to for sure So why not explain the reason? Have people been threatened? (That might explain the lack of explanation) Have they been warned that traders are bypassing KYC, or not doing it properly? (But why not say that) These are person-to-person trades; the website is effectively just an introduction agency. I don't see what angle a "state-level attack" could use, other than bullying. I don't use LocalBitcoins, I rely on LocalMonero. Can I expect this to happen to LM too?
    - seanw444 4y ago
      Most likely. I wouldn't count on it not happening. Governments don't like currencies they can't control in entirety. They're fine with crypto, as long as they're the ones minting it. And if it's backdoored. So essentially only if it's pointless. Using crypto effectively is a crime, and they will only crack down harder as the years go by.
colesantiago 4y ago
Good. That is all.
voldacar 4y ago
What is the best alternative for buying btc or crypto without KYC now?
lee101 4y ago
Not sure why they're not just axing a whole bunch of staff like everyone else.. fees on-top of this marketplace is still a profitable concept and/or you could find a buyer

266 points by madacol 4y ago

The shutdown announcement says the shutdown was caused by "challenges during the ongoing very cold crypto-winter". Wish we had more details about that. Did the ongoing winter reduce income to make the service unprofitable ?

moffkalast 4y ago
Reading between the lines: "We've made some risky investments as a side deal that REALLY didn't pan out."
- ErikHuisman 4y ago
  Yield farming client funds?
  - shp0ngle 4y ago
    Nah they had very little of that actually available. They were not operating like a big crypto exchange.
- im3w1l 4y ago
  What makes you say that? They are shutting down in a responsible and orderly fashion, so I'm willing to take it at face value that they just aren't profitable anymore.
  - moffkalast 4y ago
    That's likely also the case, but I would at the very least expect a crypto exchange company to keep all their reserves in crypto, which has now completely plummeted in value. Localbitcoins are a bit different than the typical exchange so their exposure is likely less, but if you look at Binance or Robinhood they're all gambling with their backing money like a drunk at the horse races.
joyfylbanana 4y ago
Their volumes have been getting smaller and smaller throughout the years. Likely reason is that the service just isn't profitable any more. Their volumes are public: https://coin.dance/volume/localbitcoins https://coin.dance/volume/localbitcoins These days there are lots of services offering p2p trading, and big exchanges like Binance also have p2p trading services for multiple cryptocurrencies. I would guess that Binance p2p volume alone is likely many times of that from LocalBitcoins these days. Most players don't publish their volumes though.
- unixhero 4y ago
  Thanks you for sharing the volumes link. Fascinating to say the least.

plantain 4y ago

I assume they've succumbed to law enforcement / money laundering pressures...

ABeeSea 4y ago
Probably because of all the obvious money laundering.
- luckylion 4y ago
  Were people making significant transactions through localbitcoins? Are there people trying to launder $100? Are there people using some online-marketplace if they're trying to launder $1000000 and meet random people to make that kind of transaction?
  - bflesch 4y ago
    Don't be naive. LocalMonero / LocalBitcoin is prime way to launder cash for organized crime. A thousand dollar here, a thousand dollar there, then you have converted your money to crypto.
    - luckylion 4y ago
      A thousand dollars here and there doesn't get you anywhere. And really, you'd have lots of risk -- if money laundering was the primary application, the police would surely join the fun, and if you're not meeting a cop, there's a good chance you're meeting a robber that knows you'll be arriving with lots of cash. But the amounts really don't make sense. Organized crime is certainly not running around making $1000 deals all day with different people to somehow launder money by converting it into bitcoin and back ("I found this bitcoin on a sidewalk on the internet and I've exchanged it for cash, so now this cash is legal?").
      - nikanj 4y ago
        I have drugs. I want cash. You have cash. You want drugs. You go on localbitcoins and trade your cash for bitcoin (fully legal) and then buy drugs from me via darkweb (fully anonymous). I sell you the drugs on darkweb (fully anonymous) and then offload my bitcoin on localbitcoin for cash (fully legal). This removes a lot of risk for both parties This is the original business model, but the authorities caught on pretty quickly and implemented all of those pesky KYC/AML requirements.

mteam88 4y ago

Right below the announcement is: new mobile app available! I wonder how that happened...

londons_explore 4y ago

I wonder what will happen to any unwithdrawn user funds after those 12 months? Localbitcoins has been around for a long time. I bet there are lots of wallets on there totally forgotten about with lots of bitcoins in. Quite a goldmine for someone...

enlyth 4y ago
If I remember correctly their website already had disclaimers not to keep money in their wallets long term because it's meant for temporary storage only, and they charged interest on any funds just sitting there to discourage people from doing it.

meerita 4y ago

I'm surprised that they attribute the decline in their performance to the "crypto winter". It seems like the success of a business should not solely depend on market conditions, but also on their ability to maintain profitability even during market downturns. It raises concerns about the sustainability of their operations unless the market is bullish.

UncleEntity 4y ago
> It raises concerns about the sustainability of their operations unless the market is bullish. They are literally announcing they are shutting down which should raise concerns about the sustainability of their operations one would think. —edit— I can’t resist… Jesus Fuck, dude, it’s in the title!
ur-whale 4y ago
> It seems like the success of a business should not solely depend on market conditions Please list businesses whose success do not depend on market conditions.
- donkeyd 4y ago
  Tobacco companies. No matter what happens, they just seem to be making more money.
- cj 4y ago
  You could ask the opposite question as well: "Please list businesses whose success depends on frothy, bullish market conditions" Most companies can be successful even in down markets. See basically all S&P 500 companies. Yes their stock price might be down and they may be laying people off to save money, but those are all legitimate and successful businesses by most measures.
- dale_glass 4y ago
  Theoretically, localbitcoins should be very insensitive to the bitcoin markets, because for them it doesn't matter much what the price is -- they just facilitate transactions. If transactions are still happening, regardless of the BTC price, there has to be a way to make money from facilitating them. And given that BTC has been running with full blocks for years, the transactions should be there. Plus, it's existed for a long time, so at this point the service has been built. If business is slow then it can just coast on what already exists. Of course it could indicate that nobody actually uses BTC that way anymore, and the current transactions are of a different nature than localbitcoins was made for.

AstixAndBelix 4y ago

Can someone tell me about what actually happened? Do they really need that much infra to simply allow people to meet in person and exchange money?

joyfylbanana 4y ago
LocalBitcoins stopped providing the "in-person" model years ago. Also it really wasn't a business for them as people don't need the escrow service for that. They became regulated, implementing all KYC and AML stuff and I guess that drove customers away to other venues. Binance P2P seems to be the most active these days. In-person trading has been replaced with Bitcoin ATM's I would guess.

loxdalen 4y ago

Any more info on this? No info on their twitter or instagram, no news sources reporting on it. I can't really see what the reason could be except legal.

ddtaylor 4y ago

FWIW LocalBitcoins has been virtually unused for a very long time by anyone wanting to do local crypto swaps. There are instead much better non-custodial services that still accomplish the same goals (locking/escrow, reputation, arbitration, etc.) without the same risks.

anonymoushn 4y ago
What services?
- matthews2 4y ago
  LocalMonero is nice, and reasonably active in quite a few countries.
- Geee 4y ago
  https://bisq.network https://bisq.network https://hodlhodl.com https://hodlhodl.com https://www.peachbitcoin.com https://www.peachbitcoin.com There might be more, which I'm not aware of.

sph 4y ago

This smells suspiciously like they are having legal issues. Sad to see them go, during a hard time a decade ago I exchanged some Bitcoin change I had through their platform to make rent. Easy, anonymous and straight to my UK bank account. I haven't kept up with the KYC laws, but no doubt it is not possible to exchange Bitcoin as if it were cash anymore. Thankfully the new digital pound currency will revive the (black) market for Bitcoin & co. in a scale not yet seen before.

sammy2255 4y ago

Lol.. “Mobile app now available”

olalonde 4y ago

The official reason, "crypto-winter", seems like bullshit to me. LocalBitcoins started in 2012 when volume was way lower and price was under 100$. Seems more likely that they were pressured into shutting down.

m00dy 4y ago
exactly. LocalBitcoins used to work great in Europe and Thailand from the first person experience.
- bflesch 4y ago
  AFAIK it was basically forbidden in Germany after some point.
  - m00dy 4y ago
    I will cash out some this easter in Berlin and I have done it previously.
capableweb 4y ago
Their own expenses was probably way lower before, and as the platform gained popularity, so did their expenses. Once revenue started going down after the peak ~2017, probably their expenses were harder to reduce and so the platform was harder to keep running.
fallingknife 4y ago
Absolutely they were pressured. They could not be shut down legally through the courts. It is legal to buy and sell bitcoin. It is legal to provide a platform for people to meet up and do legal business. Basically it's Craigslist.
- flangola7 4y ago
  So who had leverage to pressure them?

Olphs 4y ago

25 million in profit with 22 million in turnover last year. Not sure how that works exactly, but seems like money wasn't an issue at least. This is all publicly available since the company behind it, is based in Finland

donkeyd 4y ago
> Not sure how that works exactly My gusss is: If they take a cut in crypto and that crypto increases in value, that increase wouldn't be turnover but it would be profit?
- miohtama 4y ago
  Correct. Capital gains is profit.
sh4rks 4y ago
Further down, I'm reading comments saying that they did shut down because of a lack of profitability. So which one is it?
- nikanj 4y ago
  Selling assets pumps up the bottom line, but if that's your only source of income, you're better off just liquidating the company and cutting the losses
- joyfylbanana 4y ago
  Looking at the downward trend in volumes, I suspect the profits come from the results of selling their bitcoins they have been holding in the balance sheet, the service itself is unprofitable.
nikanj 4y ago
They held a ton of cryptos they got when BTC was $verylittle, and have been slowly selling to cover expenses?

Stagnant 4y ago

Very weird and surprising to hear, the company had been making very nice profits for years[1]. Looks like they went from 59 -> 134 employees between 2020 and 2021. They started requiring KYC from everyone trading on the platform fairly recently, maybe it had bigger effects than they anticipated? I can see why people wouldn't be too keen on KYC in a platform for peer to peer trading. 1: https://vainu.io/company/localbitcoins-oy-taloustiedot-ja-liikevaihto/823740938/yritystiedot https://vainu.io/company/localbitcoins-oy-taloustiedot-ja-li...

TEP_Kim_Il_Sung 4y ago
That's why you meet them in person: Have a chat, over some tea, get to know them. Then you KYC, and trade.
trompetenaccoun 4y ago
My guess is all the companies dealing in crypto that aren't properly licensed and aren't well connected politically are going to be in legal trouble soon. Makes sense for them to quit while they're still up, the business model has no way of standing long term. Probably smarter to take their money and just buy Coinbase stock or something like that. The fact that they introduced KYC speaks for itself, because what's the point of using localbitcoin when you need to go through KYC? The whole idea was that it's anonymous p2p trade. If they require KYC too, users might as well go to one of the proper exchanges and get a better deal. Plus all the other services like staking or NFT markets on top.

noduerme 4y ago

Awwwww... The original "meet in person" model was so good. All the bank transfers, paypal, etc. never made any sense. Just a shout out to LocalBitcoins. When I was living in Argentina during the almost-hyperinflation of 2014 or so, I got all of my living cash in pesos and USD by selling BTC to local traders who I met on Localbitcoins.com. Usually I would meet them in a coffeeshop, have a coffee, wave my phone and transfer some BTC and they would hand me an envelope with $1000 USD and ARS$9000 that would cover my rent and food for the next month. The cost was +5% for the BTC-to-cash trade, but the exchange rate was "blue" meaning, at the time, one peso was officially worth $0.33 but the blue market had it trading at somewhere closer to $0.06... and trading for BTC got you the live blue rate. One kid I dealt with a lot had a wonderful business model. He was a math student at the university and opened an office buying and selling Bitcoin. When I asked him where he got all this USD cash which was almost impossible to find in Argentina, he explained: People gave it to him. Argentines who got 20% of their paycheck in dollars, or who had dollars stuffed under their mattresses that they couldn't get out of the country. They paid him 5% to move it out. He took their cash and sold it to people like me - expats, tourists - for BTC, and sent the BTC to his partner in Miami, who changed it out to USD and put it into American bank accounts for them. So he got 5% on either side of the trade. This was the moment, around 2013 or so, when I really believed BTC would be a unit of exchange that would break the artificial currencies around the world and serve as a leveler that would allow anyone with skill to work anywhere and go anywhere; it would demolish the old sclerotic monetary regimes. Then it got regulated [edit: all its endpoints got pwnd], and Localbitcoins has not for a long time shown any P2P meetups for unregistered, silent trading-for-cash. That was its original purpose, and it served very well at the time. In loving memory.

rvnx 4y ago
Curious there, from what I understand, it seems like Localbitcoins is in general a place where you can buy Bitcoins for cheaper (19K instead of 21K). Which sounds a bit too good to be true. Could it be because it is Bitcoins collected from crime or ransomware, or just illegally exchanged ? Otherwise, why would someone sell Bitcoins cheaper if you pay them cash ?
- 4y ago

josh2600 4y ago

I bought my first bitcoins using local bitcoins many many years ago, must’ve been around a decade at this point. A guy showed up to a location with a duffel bag and a handgun. I put some money into a bag and gave him a public key. We sat there for about 20 minutes and chitchatted while we waited for the BTC to arrive in my wallet. All you kids with your fancy exchanges and dexes these days!

smcl 4y ago
You're braver than me. If a stranger who knows I have cash on me shows up with a gun, I'm bailing.
- rattlesnakedave 4y ago
  The key is to bring your own gun.
  - smcl 4y ago
    I think I'd rather have a gunless transaction altogether :D
    - rationalist 4y ago
      You would be just as vulnerable, except without the protection of Mutually Assured Destruction — just whomever is stronger wins if it goes sideways.
      - smcl 4y ago
        Yeah, but I don’t want to be in a situation where “mutually assured destruction” is even a thing. I live in a country where I could get a license and get a gun, I’ve never felt the need to as it’s continually safer year after year. If I meet someone here who feels the need to arm themselves for safety in public, I am assuming that person is a little unhinged and that getting involved with them has the potential for trouble. This may be locale-specific though, it could be a totally normal thing to walk around with a gun elsewhere.

jjoe 4y ago

This could be part of the Bitzlato crackdown [0]. Localbitcoins was referenced as one of the top counterparties. *...Similarly, Bitzlato’s top three sending counterparties, by total amount of BTC sent between May 2018 and September 2022 were (1) Hydra; (2) Local Bitcoins, a VASP based/incorporated in Finland; and (3) “TheFiniko.”* [0] https://www.fincen.gov/sites/default/files/shared/Order_Bitzlato_FINAL%20508.pdf https://www.fincen.gov/sites/default/files/shared/Order_Bitz...

domatic1 4y ago

You can see here their finances https://www.asiakastieto.fi/yritykset/fi/localbitcoins-oy/28554152/taloustiedot https://www.asiakastieto.fi/yritykset/fi/localbitcoins-oy/28...

throwntoday 4y ago

Was this site ever compromised? I used to flip BTC on here back in 2013 when coinbase would front me up to 20BTC before my ACH even settled. I had a repeat customer who got his bitcoin stolen and thought I did it. I tried to explain the blockchain to him and how I clearly sent it but it wasn't getting through to him. He sent me a few death threats but never heard from him after that. Another guy bought around 20BTC from me cause he was convinced someone in Florida was gonna sell him bitcoin miners which were really tough to get at the time. I told him it was probably a scam and he should fly out instead of blindly sending the money first. He didn't listen and about 30min after we met he called me back and said the guy wasn't answering the phone anymore. I concluded pretty early on that bitcoin was not a viable currency.

birracerveza 4y ago
I remember when I went grocery shopping, and a man robbed me at gunpoint. Another time someone busted in my home and stole all my money. And another time I fell victim to a scam! That's when I concluded that money is not a viable currency. :facepalm:
- throwntoday 4y ago
  People need to understand transactions are irreversable. They can't seem to wrap their mind around that and it's not a prerequisite to using crypto. You can be as glib as you want but there's many reasons bitcoin has still failed to be useful as a day-to-day transactional currency; that being one.
  - birracerveza 4y ago
    Glib response to a glib comment. And there are many reasons bitcoin has still failed to die despite failing (in your opinion) to be useful as a day-to-day transactional currency; the fact that transactions are irreversible being one.
    - seanw444 4y ago

Andrew_nenakhov 4y ago

Everyone in crypto I knew were using them, and then just stopped. The lesson is: Know Your Customers, Localbitcoins.

subpixel 4y ago

I recall a chance to meet someone and buy BC at about a dollar that I dismissed as shady

rstarast 4y ago

Hah, memories. I bought my one and only bitcoin from some dude in Munich via localbitcoins back in ~2013. Two weeks later I got a phone call from some Munich police officer asking whether I too was a bank theft victim of that guy. I could explain a bit about what actually happened (police had no idea about bitcoin at the time). It turned out that some money had been stolen via online banking from Spanish bank accounts, and presumably laundered by turning it into bitcoin via my localbitcoins contact.

shp0ngle 4y ago

It was fun, but looking at their trading volumes, they became irrelevant. https://coin.dance/volume/localbitcoins https://coin.dance/volume/localbitcoins I tried to log into my old account, it seemed they locked it 2 years ago in some new KYC/AML logic, and I never bothered to fix that. I was an OG from 2014-ish. Ah well.

sincerely 4y ago

Wow. This is really the end of an era. Is there any other reliable way to exchange fiat for BTC without going through a KYC process now? And does it even matter if the exchanges have switched to Monero anyways?

nikanj 4y ago
You can get your own mining gear for fiat and get freshly minted BTC? Does not scale well for the low end though
3np 4y ago
bisq. Agoradesk/localmonero.

anonymousDan 4y ago

Even in a developed country (UK), the KYC is so **ing annoying to use on most websites I have tried. Several times I have wasted an hour waving my passport in front of some poorly implemented image recognition page that failed to capture a photo and I just gave up. Would love if there was a flourishing ecosystem of local transfers without KYC. I wouldn't even mind if banks started providing physical KYC services. Maybe there is an opportunity for a company that focuses on providing KYC as a service such that you can just point each crypto exchange/custodian to that.

ploppyploppy 4y ago
Just did KYC for the Gemini app on my phone walking the corridors between the gym and the sauna at my local leisure centre. How are you having so much trouble?
- stef25 4y ago
  It was a nightmare on Coinbase back in the day. I signed up with "Joe Sixpack" but my ID card had my full name "Joe Andrew Thomas Sixpack" - KYC check fails.
  - WelcomeShorty 4y ago
    Same here. They require real mail (ISP, water, gas bill) with the identical name on it as on my ID. That does not happen, no one sends me bills with my full name, just first and last. No Coinbase for me.
  - gotorazor 4y ago
    That's exactly how airline tickets work. You can't board a plane if the ticketed name don't match your ID name in full.
- anonymousDan 4y ago
  Not sure, from memory one issue is my passport is from a different country than where I live. Several sites just could no handle this. Or maybe I just have a weird face :)

1970-01-01 4y ago

Wow, this feels like the beginning times all over again. At least there was a notice! Does anyone still barter for coins?

rmac 4y ago

I met a guy in a Hawaiian shirt at a coffee shop; I awkwardly laid out thousands of USD on the small table between us. We made small talk waiting for block confirmations. Thanks localbitcoins ♥

Roark66 4y ago

I wouldn't be surprised if they had trouble completely unrelated to crypto. I had to close up my mini bitcoin exchange business to and from UK pounds I started shortly before back in 2018 or so. I spent few weeks writing software to link with kraken, bittylicious and scrape online banking to have an automated way to exchange BTC for GBP using UK's faster payments. Although in theory faster payments could take up to a day within the same bank it was instant. So I opened a bunch of bank accounts (6 if I remember correctly, this covered all major banks - smaller banks usually were fronts of those larger anyway). And I could offer much better rates and much quicker settlement times than other sellers on the platform. I also had IP location based trust API integrated so I was reasonably safe from obvious scams. I was pretty happy when money started rolling in... (up to £2k per day in profit was my best).... Fast forward 2 weeks and every single bank account I opened was closed by the bank despite me personally talking to each branch manager telling them what I'm opening those accounts for and having their assurance it is fine. All the letters were the same. There was no instances of fraud etc that I worried the most about. Nope, none. All said they closed my accounts for "business reasons", or "chose to withdraw service for undisclosed reasons". When I pressed them about it in person no one would tell me why, other than one manager telling me my accounts were flagged by "profit team" and it had nothing to do with crypto. I suspect it costs(used to cost) the bank money to receive faster payments, but they are free to an account holder. On a good day I would get £35k in, all in £10~£20 payments and I guess the banks didn't like it... Most businesses that get incoming small transactions usually pay a lot for the privilege. Either to CC handling providers or others. All my incoming transfers were from individuals sending (free to them) bank transfer to me (free to receive). You can imagine I was quite unhappy with the result. I looked into what it would take to have a direct link with faster payments settlement office and it is only open to banks...(integration costs back then woukd start at £10mil) Remember those smaller banks that were only fronts for larger ones. Most likely this is one of the reasons. So in conclusion, crypto has its issues, but as long as I can send someone a tenner for pennies it will have my support. I have no idea why licalbitcoins failed, but I wouldn't be surprised if banking had something to do with it.

pjc50 4y ago
> All said they closed my accounts for "business reasons", or "chose to withdraw service for undisclosed reasons". I suspect this was the "you've tripped our money laundering rules in a way we're not allowed to tell you".

hmmm3 4y ago

I'm surprised no-one has mentioned BestChange as the go-to aggregator for cash <> crypto transactions, including most major cities in the US.

A6gYPfxNas 4y ago

RIP to the OG. Did my first transactions (in person, with cash, at a coffee shop) there. For anybody that still is looking for this type of service, check out AgoraDesk.

ViceCitySage 4y ago

Though I prefer Monero ($XMR) over Bitcoin, it's sad to see a non-KYC Bitcoin exchange go away. Luckily, LocalMonero isn't related to LocalBitcoins so that is still around.

tiahura 4y ago

So what is the best way to find someone local to buy BTC from with cash?

58x14 4y ago

I still have a few BTC in a LBC account from 2013. I had forgotten about it until a few years ago, and the email account I used was inaccessible. I have the 2FA backup codes sheet but nothing else. I wonder if they’ll let me recover them. I bought my first BTC through LBC. RIP, the end of an era.

denton-scratch 4y ago

Why are they terminating operations? The article doesn't say.

victor22 4y ago
Because they were forced to for sure, this is a state-level attack on bitcoin, this will hurt now but will speed up decentralized exchanges
- denton-scratch 4y ago
  > they were forced to for sure So why not explain the reason? Have people been threatened? (That might explain the lack of explanation) Have they been warned that traders are bypassing KYC, or not doing it properly? (But why not say that) These are person-to-person trades; the website is effectively just an introduction agency. I don't see what angle a "state-level attack" could use, other than bullying. I don't use LocalBitcoins, I rely on LocalMonero. Can I expect this to happen to LM too?
  - seanw444 4y ago
    Most likely. I wouldn't count on it not happening. Governments don't like currencies they can't control in entirety. They're fine with crypto, as long as they're the ones minting it. And if it's backdoored. So essentially only if it's pointless. Using crypto effectively is a crime, and they will only crack down harder as the years go by.

colesantiago 4y ago

Good. That is all.

voldacar 4y ago

What is the best alternative for buying btc or crypto without KYC now?

lee101 4y ago

Not sure why they're not just axing a whole bunch of staff like everyone else.. fees on-top of this marketplace is still a profitable concept and/or you could find a buyer