Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.
Popular peer-to-peer platform LocalBitcoins reportedly removed the option that enables users to buy or sell cryptocurrencies in person for cash.
According to the reports of users, LocalBitcoin has hidden or removed the option to buy and sell digital assets for cash in a face-to-face format.
LocalBitcoin is a peer-to-peer platform for trading cryptocurrencies. The platform is available for users in 248 countries and 7571 cities. Only last week the amount facilitated in Bitcoin trades accounted for $58 million.
Let us also remind that the name of the platform appeared in a number of headlines this January. At that time it became a victim of a phishing attack.
What Have Happened
The first person to report the issue was a Reddit user with a nickname GrayLife. Then the fact that cash payments were no longer available was confirmed by a number of Twitter users.
At first, some people supposed that the restriction might be limited to the U.S. only. But later it became obvious that it has affected other regions as well. People have noticed the problem in India and some other countries.
Now if you want to pay in fiat for digital assets, you need to use electronic payment systems and bank transfers. It is clear that the majority of users are disappointed with this news. As a result, many of them have started to seek other options to buy and sell coins in an anonymous way.
However, the number of options for obtaining Bitcoin anonymously is being reduced these days. But it is still possible to use Bitcoin ATMs, as the majority of these machines do not require to pass KYC procedures up to a certain limit.
There are no official comments from LocalBitcoins yet both on its blog and its Twitter feed.
But at the moment it looks like this change will affect the LocalBitcoins platform. Other platforms that offer some similar services related to Bitcoin Cash, Monero and Ethereum do not have any plans to disallow cash-based transactions, at least in the nearest future.
Moreover, this move has at least one positive impact. In response to this news, LocalEthereum has announced temporary removal of its trading fee on cash-in-person exchanges.
The reasons for the changes on LocalBitcoins remain unclear. There were no prior warnings which make us think that it could be a spontaneous decision. And it’s highly possible that it has been taken under the influence by any external parties.
Though the platform was doing quite well, allowing users to pay for BTC with cash without dealing with KYC requirements, governments all over the world do not positively welcome any initiatives enabling users to purchase cryptocurrencies anonymously.
One of the factors that may have resulted in such changes could be the decision taken by the Parliament in Finland. It voted for a new bill on service providers in the virtual currencies industry. Moreover, some amendments on anti-money laundering provisions and terrorism financing (AML) regulations were approved as well.
Given this fact, to continue operating LocalBitcoins and other cryptocurrency trading platforms should comply with AML requirements.