LocalBitcoins Shuts Down P2P Crypto Exchange Service
Finland-based peer-to-peer (P2P) cryptocurrency platform LocalBitcoins is shutting down after serving its customers for more than 10 years.
LocalBitcoins officially announced the termination of services on February 9, citing the tough market conditions of the ongoing cryptocurrency winter.
“Regardless of our efforts to overcome challenges during the ongoing very cold crypto winter, we have regrettably concluded that LocalBitcoins can no longer offer its Bitcoin trading service,” the firm said.
LocalBitcoins encouraged all customers to withdraw crypto-assets from the platform and asked them to continue withdrawing Bitcoin (BTC) from the LocalBitcoins wallet. According to the announcement, users can withdraw crypto assets from LocalBitcoins for 12 months. “However, of course, we encourage you to continue to withdraw earlier,” the firm noted.
According to the termination timeline, LocalBitcoins will immediately suspend all new registrations starting February 9th. Trading will be suspended on February 16, while after that date users will only be able to log into the wallet to withdraw their funds.
LocalBitcoins’ abrupt shutdown comes just after the United States Financial Crimes Enforcement Network named the platform among the top Bitcoin senders of the Russian-linked exchange Bitzlato. US authorities launched a major enforcement action against Bitzlato, accusing the firm of money laundering and allegedly facilitating the circumvention of sanctions against Russia.
Jukka Blomberg, head of marketing at LocalBitcoins, denied any kind of collaboration or relationship with Bitzlato in a statement to Cointelegraph in January. He stated:
“Based on our data, there have been virtually no transactions between LocalBitcoins and BitZlato since October 2022, after we stopped servicing Russian user accounts and accounts of users residing in Russia.”
Blomberg also emphasized that LocalBitcoins has been regulated by the Finnish Financial Supervisory Authority since 2019 and strictly followed the Know Your Customer and anti-money laundering regulations.
Related: Binance Blocks Some Accounts Amid Bitzlato Case: “Funds Are Safe”
As previously reported, Russia was once among the largest markets for LocalBitcoins, topping Bitcoin trading volumes on the platform as of June 2020. Total trading volumes on LocalBitcoins have declined after reaching an all-time high in December 2017, according to data from Coin Danse .
Weekly Bitcoin trading volumes on LocalBitcoins fell below 1000 BTC in February 2021 and have never recovered since. LocalBitcoin’s last recorded weekly BTC trading volume was 283 BTC, or around $6 million. By comparison, major exchanges like Coinbase trade $282 million worth of crypto on a daily basis, according to data from CoinGecko.
