Bitcoin Forum

So I wanted to share with you all the problems with trading Bitcoin on LocalBitcoins.com

There are risks with any online trading, and when Bitcoins are involved - the inherent anonymity and irreversible transactions make it really easy for Bitcoin scammers to make an easy buck.

Localbitcoins.com does offer a Dispute process, and has certain security measures that try to make it safe for both buyers and sellers.

1. I.P. Address check - can be faked using a Proxy
2. Phone Number Verification - can be faked using a SMS servce
3. Real Name Required - can be faked using fraudulent ID
4. Trust Score - Scammers give each other trust scores and testimonials
5. Dispute is not possible after the Trade is completed


The #1 Problem with their site is the Escrow service - localbitcoins.com requires sellers of BTC to put their coins in Escrow - this is a huge F#&K%!G MISTAKE.

Users are not able to make a trade unless Bitcoins are held in Escrow, these coins are locked until the Trade completes - whereby the Seller can push a button to 'Release the Bitcoins' or the timer for completing the trade runs out (sometimes this is 2 hours or 12 hours depending on the user). If the trade is cancelled by the Buyer before either of these options, that is the 3rd and final way that Bitcoins can be unlocked from Escrow.

The intention of their Escrow system is for Sellers to prove they have the Bitcoins and they can release the coins once they receive the buyer's funds.

Here's the problem, localbitcoins.com is a vehicle for transacting Bitcoin but offers no protection or safety from scammers
- You are required to place Bitcoins in their Escrow System - but they don't allow you to cancel the trade
- Their Escrow System is not meant to protect the Seller of Bitcoins
- If you receive payment for Bitcoins, localbitcoins.com is not responsible for making sure it's legit
- Bitcoins released from their Escrow are not protected and good luck trying to dispute a scammer

These are my conclusions about the service after using it a couple times and going through the process of getting scammed on the site only to receive Zero Support in retrieving my stolen coins. Although they offered to block the User, it does little to prevent the scammer from creating a new account from a new IP Address.

My two cents: use cash for Bitcoins.

Avoid online payment systems altogether - it's the equivalent of printing out your BTC-e voucher and folding it into a paper plane on the hope that it ends up where its supposed to.

Say no to scammers.

On top of all this, in view of most recent arrests in Florida, any seller on localbitcoins (especially high volume one) can potentially be arrested for a mere fact of trading. States define such activity as money transmitting, which in turn requires proper state license. The arrest mentioned above were made by undercover law enforcement agents posing as Bitcoin buyers. So, the next time you arrange for a meeting to sell bitcoins, you could be meeting with the police officer.

I just removed my account. Thanks for the headsup. Not only is it illegal, they are a fruad and scam. I cannot prove it, but it is my opinion of them.

OP:  You said you got ripped off.  What payment method did you accept?  Was it cold hard cash or some reversible form of fiat?  If you accepted reversible funny money for your BTC who's fault is that?

BitBits:  You go on to repeat the stupid "got arrested for selling Bitcoins" lie.  The cops do not give one crap about people selling or buying BTC (the IRS is another matter).

What happened there is that the undercover cop repeatedly told the BTC sellers that they were going to use the BTC for illegal purposes.  That is what they got arrested for - not selling BTC.

I use localbitcoins all the time.  It is, by far, the best and safest way to buy and sell BTC.  I have also met dozens and dozens of totally cool people with a shared interest/passion for Bitcoins.

pekv2:  I expect you are just trolling since you know better than these two noobs.

Well I guess that can be challenged now, since the IRS considers bitcoin to be property. Unless that has changed, I can't get in trouble for selling my TV at starbucks.

We are in great shape here.  The various factions in the goobermint could spend years fighting amongst themselves just trying to figure out what Bitcoin is.  We can use them against each other until they come up with a unified definition.

No I am not trolling. Just want to avoid illegal activity thats all.

I never really trusted this site anyway!

Treat localbitcoins like Craigslist.... always do face to face interactions otherwise.... go elsewhere for online pickups. 

This concept is the best way to buy/sell bitcoins.

If you were to not use escrow there would be a lot of the opposite scams. The BTC seller could simply walk away once payment is received.

Hmm, I hadn't heard of this story yet; still, it strikes me as being weird that he got arrested for ignoring something that could very well be a lie, or someone's idea of a joke. I mean, if it was a situation in which there was a clear and obvious illegal operation going on, and he willingly helped (by selling the btc in this case), then I could understand his arrest; but that wasn't the case, right? Did this hold in court (or is it expected to, if the case still hasn't been to court)?

Most of what you posted is true, although you can't really fake trade scores. In order to have the score increase, the trade must be confirmed and the bitcoins released from escrow. There are fees every time a coin goes through escrow.

The trade fee is only 2% (a percentage of a transaction) so scammers could simply trade very small amounts between each-other

wtf!??!!? Are you absolutely SURE there are undercover police trying to nab people simply for buying BTC?

I seriously SERIOUSLY doubt it.....  ??? ??? ???

This may be great if you are in the USA where most of the site user base lives, and you want to meet up in the big city you live in. But in many other countries, you are more or less screwed.

Please provide some authoritative news links supporting the arrest incident.

www.100bit.co.in is launching soon. You may count on us in terms of scammer protection.

AGAIN:  What happened there is that the undercover cop repeatedly told the BTC sellers that they were going to use the BTC for illegal purposes.  That is what they got arrested for - not selling BTC.  This story was all of this forum and all over the news when it happened.  You might try Google.  It happened in Florida.  Try "Florida arrest Bitcoin" or something like that.

I use localbitcoins all the time.  It is, by far, the best and safest way to buy and sell BTC when done correctly (cash, in person, face to face, public location with free WiFi).  I have also met dozens and dozens of totally cool people with a shared interest/passion for Bitcoins.

What will make you different from localbitcoins?  Why would we want to use your site rather than localbitcoins, which has never lost or taken any of my BTC in all the years I have been using it?  How do we know we can trust you with our BTC (assuming you operate as an escrow agent like localbitcoins does)?

Thank you. Your search keyword (http://lmgtfy.com/?q=Florida+arrest+Bitcoin) has helped me to find out related news stories.


This is a Q I dont expect from a Hero member. You are correct that 100bit.co.in needs to build up trust so that we can trust them for escrow and I believe that can only happen with time while users test them with small fractions. But why will we use them while LocalBitcoins is there is NOT a valid question in my opinion. Why we started to use Bitstamp while BTC-e was there ? Why do we use Citibank while bank of America is there ? Competition is always good & healthy. We should not vote for monopoly in a free market.

I am not against competition, far from it.

I ask because I am curious:  what exactly do they think will make people use their service instead of someone else (localbitcoins for example).

In other words:  what is their unique selling proposition?  What sets them appart?  What makes them better?

If they do not have a differentiating factor then they are just a "me too".  Nothing wrong with that really but I won't move to another site unless it is better in some way.

Localbitocin unique position is let local buyer and seller trade with each other rather than relying on the traditional banking system to use wire to transfer money aboard to one of the main exchanges to buy and sell.

You are not following the thread.  I use localbitcoins all the time.  I know them.  I trust them.  My questions are directed at http://www.100bit.co.in/

I am asking http://www.100bit.co.in/ what they are planning to do that will be better or different than localbitcoins.  I ask them because they advertized in this thread about localbitcoins.

+1

I also want to know the same :)

You never posted any real evidence of people being arrested for simply trading BitCoin through localbitcoins....

Pretty sure he just made it up because he's naive and paranoid....

I've never had any real problems with localbitcoins.com, if I can move the cash out of my account I know it's legit and can release btc, if not then I don't. So simple. Although I've had several scam attempts that caused my btc to be locked up for a few days, and some check return fees, but I'm okay with that. I want the buyer experience to be priority so we can get more btc adoption. More competition for localbitcoins would also be awesome, as long as the UX for buyers is good.

doesnt have to be. little bit of paranoya is good for you.
you never know who you are going to meet, so its good to be carefull.
personaly all my experiences were just awesome.

Even if the trade is ok, you might end with fake cash.

Although I was using LB before, but now, I stuck with trustworthy exchangers.

If it is a large transaction then I just have them meet me at my bank, I have the bank teller count and check the money, release the BTC, then usually deposit some and keep the rest.  For smaller transactions I test any bills that feel "funny" to me with a special marker.

Easy solutions to the "fake money issue", which it turns out is not a real concern after all.

This doesn't sound like a real world story to me. I really feel like most stuff in the op are just hyperboles. I trade there frequently and I haven't experienced any of the problems portrayed there.

May you elaborate more about this

"For smaller transactions I test any bills that feel "funny" to me with a special marker."

I think it is actually police nabbing people for selling it without following AML/KYC laws.

There is a case in FL where some guy was selling BTC at a massive markup and the UC told him that he was going to use the BTC for very illigal purposes. They arrested him on a bunch of charges, all related to selling BTC.

I don't understand why people don't just buy from trusted exchanges instead of going to the trouble to meet someone IRL with not only a chance of getting scammed but paying a lot more for the BTC then they're worth (at time of purchase).

Wow thanks for the heads up man. I have used that exchange couple of times but i didn't know the buyer can cancel the trade and seller can't thats not good. I'll sure think again dealing in future there.

People want to make trades in an uncentralized fashion

If you deal with a "trusted" exchanged you still have the possibility of getting "GOXed"

Where did u get this part that says a Seller cant cancel a trade ?

If the seller has set it up for full escrow then the seller cannot cancel the trade.  This feature is used when the people are not going to meet face to face (bank transfers, WU, PayPal, etc.).  I always meet face to face for cash so I do not use the full escrow service.  Instead I simply fund the transaction to show that I have the BTC ready for the buyer, we meet, they give me the cash, I count it, then I release the BTC to them.  Simple.  If they don't show I just cancel the transaction and my BTC are released back to me.

If you use the site correctly there are no issues.  It is a great site.  Use it all the time.  Never had any issues at all.

So you want to say the whole localbitcoins things are fake where every day hundreds of successful transaction performing..!?

This is not true.  You are not required to put your coins in escrow.  The seller might choose to put the coins in escrow because the buyer might request that, or because the buyers might feel more comfortable but for in person cash face to face transactions simply funding the transaction without turning on the escrow function works just fine.

I doubt it is that easy to just fraud your way through localbitcoins... someone would be able to tell between fraudulent ratings and real ones. I'm sure admins would also be able to monitor the ratings and how quick they get them after they open an account

Well, the site does have a lot of users, so it's not exactly easy to monitor ratings just like that; some kind of automated system must certainly be in place. And how quickly you gain feedback isn't exactly a very good indicator for such a system, as you're likely going to get a lot of false positives, and miss out on the more cautious scammers.

On the other hand, if the only ratings a user has are from other relatively new accounts and for low amounts of btc, then perhaps you should be cautious when dealing with them. And in the case the feedback is coming from older, more established accounts, then I assume an automated system could catch them, by linking them to all the accounts used for scamming.

Use it sometime you will know.  :)

When you do this then the buyer is the one taking the risk as if the seller was going to scam then he could just take the cash, put it in his pocket and walk away.

I personally would only use localbitcoin if I met the person in a busy place. I don't trust anyone (meaning web sites or exchanges) with bitcoins. Also, you have to remember that the Govt has its eye on local bitcoin. IF you buy from the wrong person, they will get you for money laundering, although i think they are just using localbitcoin to try to reel in the bigger fish.

All untrue.

The government has charged multiple people with violating money laundering charges when they were trading on local bitcoin for large amounts and received high premiums

Do you have any proof for this?  Links?

The only stories I have ever read involved police arresting someone for selling bitcoins after the undercover officers told the seller many times that they were going to use the BTC for illegal purposes.  I have never seen a story of anyone being charged for money laundering directly.

So unless you have credible links you are just repeating rumors and spreading FUD.

i just don't like the interface, and stay away from online transfers anyway. i do use LBC for craigslist-type deals, for cash only. i don't like the idea of using them for escrow, and i certainly don't want to pay them for it.

The only issue in these cases is if the seller was following AML rules, including having a money transmitter license. If he undercover police told them they were going to use the BTC for illegal purposes and the seller followed all of the AML rules then there would be no case.

I think these cases are one of the same. I think the seller was charging something like a 30% markup on trades. When the police traded with the seller they claimed to be using the BTC illegally, and when the seller did not report this they charged him with a separate crime. IMO this is very bad public policy but still a reality.

I wouldn't use them for too high of volume. After seeing some of those stories, I definitely figured it best not to be a liquidity provider there. And I prefer to deal in cash only -- P2P and not through the site directly.

Local bitcoins does allow you to meet to do face to face transactions that are not part of their escrow service.

Sure, I know. The only way I use LBC is for in-person cash transactions. However, to be a liquidity provider and be able to charge markup over/under the exchange price, you need to have a good reputation. That means using LBC escrow (paying fees) and garnering confirmed feedback.

Will its not surprising that scamming people using BTC is much easier than using Paypal.
Coz the BTC system is something new to all.
Of course naturally a new system has  many bugs and problems that can be exploited by thieves online.

Just like when you send a btc to the other wallet.
There is no system that can protect the sender/buyer from scammers.
Unlike in paypal that even if the scammer already get your money. You still have  chance to get it back by filing a dispute.
Problem from this dispute system of paypal is that it is also abused by some BUYERS/SCAMMERS who want to get free stuffs. >.<

So there is no PAYMENT METHOD that is safe FOR REAL. :-\

There have been several threads on here about attempted robberies at face-to-face LBC transactions when the buyer has tried to steal the seller's phone so the release code could be entered.

I have done hundreds of transactions with not even one single issue (except a couple of no-shows).

Did you ever find any proof for your claim?  Any links?

The only stories I have ever read involved police arresting someone for selling bitcoins after the undercover officers told the seller many times that they were going to use the BTC for illegal purposes.  I have never seen a story of anyone being charged for money laundering directly.

So unless you have credible links you are just repeating rumors and spreading FUD.

I would argue that the risk of this happening is pretty small but it is still possible. The best way to manage this risk would be to simply meet in a public place and use common sense when dealing with strangers.

I'm sure that's possible, but seems rare and unlikely. Meet in a public place, and preferably deal with people with some level of positive feedback. But mostly, just meet in a public place. Starbucks has cameras -- that's sort of a deterrent...

That is probably the best advice to give when dealing with large amounts of cash when you do not wish to use the banking system.

you will always have rare stories of robberies with p2p deals (same with craigslist). i have never had a problem doing in-person deals on localbitcoins, and it doesn't seem like things like that happen too often. +1 on public meeting places.

I would take feedback with a grain of salt as it is always possible in theory that someone could buy a LBC account. I think it is always important to make your safety your #1 priority.

Of course. Always take things of that sort with a grain of salt. But remember, LBC labels low volume trades as such in feedback. And confirmed trades = % fees on every transaction paid to LBC. So there is clearly financial disincentives in place to padding feedback for the purpose of scamming or selling an account.

CL and LBC are both dangerous when meeting a stranger in person. You should always meet in a very public place with lots of potential witnesses.

I have never personally been robbed but have dealt with a few very sketchy people.

I've used CL and LBC loads of times. Never had any problems. Of course you hear of horror stories here and there. When large amounts of money are involved, certainly meet in a public place. There is really no reason NOT to meet in public with a bitcoin transfer. But I've sold some furniture and stuff out of my house on CL. :)

i've used LBC a few times. never had any problems myself. YMMV.

I would say that the vast majority of CL and LBC transactions will go through without a hitch (I would say that you get a lot of "no shows" but the only thing lost here is time) but when things go wrong they can go very wrong.

Nevertheless, it is the only peer to peer service for buying Bitcoins working globally.

Yeah I didn't read all the replies, but the OP is wayy off with every statement made.  I have over 500 ONLINE trades, and have traded over 100 BTC's in 14 months, have ran into ONE issue only, about 6 months ago.  I did get screwed once for about $300, (someone mailed me counterfeit money), so I guess its not 100% secure, but with over 500 trades from everything from Paypal and credit cards, to Postal Orders and Moneygram, from experience, I can say, it's safe, and the OP is flat out wrong.

You have to be careful on any trade you make on everything but that doesnt make localbitcoins a scam .

Obviously I am a bit late in this post, but as I have over 2000 trades on LBC and turned over more $$$ than I would like to admit, I thought my feedback may help some people. Be aware that I am a trader and just buy at wholesale (When I can get it) and mark up a little and on sell. Generally I buy from mini 1st time sellers up some serious game players. The fight for me is just getting enough ongoing stock for my customer base. Really doesnt matter what quanity I get, normally I am out within minutes to a few hrs, that is not to say we do not go through some dull patches.
Either way, the issue isnt getting scammed a few $100 to a Few $1000. That is peanuts. The issue is Banks having zero tollerence for LBC in general (at least for Australia). A bank will shut down your account for even taking a few $100's from a Pilshed bank account. and that will cost you $100,000's of long term income ESPECIALLY CBA as they are king (and yes I lost that one, Fucking ouch)
Scammers dont stop, they still try with me every now and then, now I am concrete solid, follow my terms or hit the road. Big question is why would they still try on me when there are newbee's everywhere.

BIG THING, issue is not someone scamming you for the coins. Issue is taking the payment from a stolen bank account. BOTTOM LINE. NEVER NEVER EVER GIVE YOUR BANK ACCOUNT TO ANYONE WITHOUT CHECKING THEM OUT. They will send you cash no matter what your terms are and play dumb.

Hope someone gets something from my info.
AND if there are any out of work bikies out there. I am happy to pay $2000 to $5000 from some of my past scammers (Before I wised up) to find them, stick a bottle up their ass and smash it. Dont care if they took $100 from me, same reward.

Anyway here is my Bible, hope it protects someone. If anyone cares, this is me...   https://localbitcoins.com/accounts/profile/greenglobal/

FRAUDSTERS READ THIS, PEOPLE WANTING TO AVOID FRAUDSTERS READ THIS.
This is warning for sellers, if you are a buyer, then you are already protected by Escrow, Just mark paid when done and before timeout and you have nothing to worry about.
All Fraudsters/ Sellers should know the following

1.   I am aware that people try and pay sellers with stolen Bank/ PayPal Accounts obtained by Pilshing. Banks will generally shutdown stolen bank accounts within 24 to 48 hrs. I will never give out my banking details until you provide ALL OF THE ABOVE ID REQUIREMENTS ABOVE). New traders will never get their coins released until funds have been cleared in my account (24 to 48 hrs Max).
2.   Online transfers from CBA is the safest because the user must have a SMS/txt from CBA/Netbank with a security code to complete the transfer. HOWEVER, I am aware that Fraudsters also PORT the victim's mobile number so they also have control of the txt, meaning they have access to the online banking and the mobile and have full control of sending the funds. They can also break into the victim’s house and Steal their phone too. Saying this, CBA is still the safest option as ALL OTHER BANKS SECURITY IS USELESS. Any Pilshed account means they can immediately send funds out to a bitcoin seller. DO NOT EVER IMMEDIATELY GIVE YOUR BANK DETAILS TO ANYONE UNTIL 100% SATISFIED THAT THE BUYER IS REAL!!!
3.    Bitcoin trading is not tolerated by any bank. If you get a payment from any Pilshed account, The bank will shut your account down and ban you from ever opening another (Even a Pty Ltd if you are the signature behind it). I have lost CBA, NAB and Suncorp for this reason. Even for a $200 payment. This = $100,000's is lost trade. Don’t trust anyone except MAYBE Pro Traders with 500 plus trades. (We have to much invested in BTC to scam anyone)
4.   I am aware that Fraudsters are Experts of Photoshop and supply doctored Proof of payments. I am an expert Photoshop too and know exactly what to look for. Proof of payment means nothing without money in the bank. If accepting CBA/NETBANK, get the buyer to add your email to the "3rd party Notification" in the app/ online sending. That way you get notification from the bank themselves and not the buyer. BUT be aware, you only see the last few numbers of your account on the email so also is not without fault.
5.    I am aware that Fraudsters are Experts of Photoshop and supply doctored Proof of ID and Address. I am a expert Photoshop too and know exactly what to look for. Always inspect all documents supplied in highest magnification.
6.   I am aware that if it comes to a dispute between a seller and a Fraud Buyer, It is only your word vs his. A fraudster has nothing better to do than give stories to LBC admin and try and get a payday after LBC admin Mediation (Maybe even a 50% share. Just because the seller is right, don’t assume you can win. They can Photoshop whatever is needed and say that you Photoshop yours docs. Make it hard from them at the start and they will leave you alone. THEY ARE EVERYWHERE IN LBC.
7.   More to come, Fraudsters, Piss off. There is nothing for you here.

I've used localbitcoins before. I think you just gotta have some common sense, It's usually easy to pick out a scammer. Like OP said though, there is definite risk when using currency with irreversible transactions

There's nothing to be worried about as a buyer when you use escrow.

Real good info here , though i always trust LBC but got lil confused after reading the post of OP but thanks to you , and i always trade with people having 100+ feedback atleast

I think BurtW must update this thread, with some details on why they arrested him?

If localBitcoins are targeted in the USA or any other country, for whatever reason, we should all know about it. We cannot use a service and then get arrested, for doing something wrong, if everyone kept saying, it was a legitimate operation.

I think this is why, Coinbase is going the regulated / licenced route in the USA, to prevent this from happening to other people.

One of these days, you will not be able to buy Bitcoins, if the NSA/FBI/NASA/ or ALL government institutions have not approved it. {So much for privacy and annonymity}

I've been trading on LBC for almost 2 years and I've never had any problems meeting face to face.

Online payments require varying levels of caution that cash solves. P2P is very advantageous.

BurtW hasn't been online since 28 dec , so we don't know where he is , he will surely give us some heads up when he gets back.
Hope he is doing fine

Was gonna use LBC, but then Circle.com came out and it instantly took care of that.

How so? Circle has limits on the amounts, LBC does not.

Correct, but those instant access to money limits are increased over time as you conclude more transactions and build trust with Circle. I've only been using it for a few months now, and never used LocalBitcoins, but Circle is amazingly easy to use.
The issue with LocalBitcoins, for my area, is that the sellers are few and far between that are willing to do cash, and they usually have minimum limits that aren't necessarily accessible to everyone, plus their markup is crazy high.
There's pros and cons to each option, Circle works best for me and I have absolutely no reason to ever even look at Localbitcoins.

I have used cex.io and have no probs in months,not sure of LBC only used once and was bank transfer and everything went smooth but hear a lot of stories

I was arrested for trading Bitcoins, on Localbitcoins.com, in Colorado.

So far defending myself has cost our family almost $200,000 

We can use all the help we can get, please see the fundraising web site put up by my wife Jean: 

http://www.burtw.com

Can anyone post a list of payment that is safe to accept on localbitcoins? I have taken cash deposits, walmart2walmart, moneygram, and WU. I'm assuming the payments I take are all safe. Correct?

Wow that as an astronomical sum..

Why were you targeted by the authorities? Was it the sheer amount of Bitcoins you were trading? Or just unlucky?

While I have heard good things about localbitcoins.
I believe the safest way to buy and sell BTC is on an exchange platform.

Although localbitcoins is well established, cash and face to face transactions must be done with great caution and coordinated properly.

There are a myriad of  potential dangers that one must deal with when exchanging funds in public location, example armed robberies and in some cases con-artists supposedly "forgetting" their laptops and borrowing yours with which they may plant malware or create exploits in order to later compromise your system.

Or getting arrested.

It's insane that you got arrested for this. Puts fear into my heart. I've been wanting to get into selling btc for some profit on the side, but it's scary that you could be set up so easily. An undercover could easily mention in the middle of you sending the bitcoins that he uses darknet markets and possibly charge you before you even get a chance to turn him away. They can be so sly and shady, I really hate the regulation and police who have nothing better to do than set up "stings" on localbitcoins.

I would absolutely donate to you if I had some funds to spare. I hope everything works out for you. Your case could decide the future of bitcoin selling and these "stings" being legal or not. If I, by some miracle come accross a large sum of money (win the lottery etc) I will donate to you without a doubt.

Obviously you have never had to hire TWO good federal defense firms, one for the criminal felony charges and the other for the civil forfeiture.  As I said, my defense is approaching $200K, this does not include the property (money, Bitcoins, etc.) they seized and want to keep.

I wish you luck with this, but there is no way you're getting anywhere close to $200K without getting shut down by paypal.

Anyone want to place bets on how long that paypal account survives?

This might make for an interesting Sixth Amendment case.

In addition to PayPal we also accept Bitcoins at the donation site:  www.burtw.com (http://www.burtw.com)

Yes, the sixth amendment need to be amended to read  "If they can afford it."

What are you trying to say?

I have done plenty of trades on LBC without any problem.

So had I.

Selling bitcoins on localbitcoins cost me $284,373.00 in legal fees and other expenses.  We had to use our retirement savings and take out a second mortgage on the house - which we will be paying off for years to come.  I take back everything nice I ever said about localbitcoins.

I am interested in this statement. Previously, your primary criticism was regarding civil forfeiture and the incentives this gives law enforcement to go after the innocent.

Was the government's "suspicions" somehow based off of something that happened on LBC? Did LBC actively facilitate in helping law enforcement gather "evidence" "against' you?

I realize this is most likely ongoing litigation (so you can get the money they stole, er seized from you, however any response, no matter how vague would be appreciated.

There are two ways you can get a ransomware request:

1) "Hey, my computer is locked up and it is asking for Bitcoins.  Can you sell me a small number of Bitcoins to send to the bastards so I can get my data back?"

2) "I have a bunch of Bitcoins I need to convert to cash, BTW I got them from [ransomware/drugs/selling stolen goods/etc.]"

It seems to me the first case is not a problem.  In fact you are helping someone who is in big trouble and the sale would be small, right?

Are they really saying case 2)?

BTW I will be speaking tomorrow in Boulder:

http://www.burtw.com/speaking-schedule--new-.html

I would be interested in how helping someone get their data back from a ransomware scam is criminal.  The criminal is the one doing the ransomware, right?

How did they turn selling Bitcoins to someone so they can get their data unlocked into a criminal offense?

I don't doubt they did, just wondering what legal gymnastics it took.

Yes, the feds do operate undercover purchases and sales of Bitcoins as they see fit.  I was the victim of these "sting" operations and it cost me, my family, and my finances dearly.

Was this police department charged with buying Bitcoins in order to get their files unlocked?

https://www.bostonglobe.com/business/2015/04/06/tewksbury-police-pay-bitcoin-ransom-hackers/PkcE1GBTOfU52p31F9FM5L/story.html

OMG that is the most fucked up thing I have seen lately and I have seen a lot of fucked up things:

http://www.justice.gov/usao-sdny/file/632166/download

See paragraph 9.

Basically if you sell Bitcoins to help someone get their data back they can charge you with "knowingly enabling the criminals responsible for the attacks to receive the proceeds of their crimes"

AGAIN I ASK did you go put all the cops that paid the ransom for their data in jail?  THEY ALSO PAID THE CRIMINALS!!!  Every single cop, judge, agent who has ever paid off the criminals running the ransomware should be immediately arrested.  Hop to it Aaron.

So helping people get their data back from a fucking criminal is against the law.

To all the Homeland Security agents reading this:  how do you sleep at night?

I think you are preaching to the choir by posting here. I would find it very hard to believe that anyone here can seriously disagree with you on this.

I would suggest sending a letter to the editor of the Washington Post and/or the Wallet Street Journal, as either of these publications publishing such hypocrisy will more likely elicit change. I will be sure to keep an eye open for such editorials and if I don't see one in the next week or so, I will try to put writing one myself on my to-do list. I'll send you a copy if I am able to write one.

My wife has flooded every press outlet she can find with our story to no avail.  Not one single story yet.

What about the one regarding CAMP.BX being charged with selling bitcoin to people paying for ransomware while various police departments have themselves paid for such ransom? IMO, that is a new level of ridiculous.

Just because it isn't your story that you are getting out there to elicit change doesn't make the change you are looking for any less good.

The public details in your case were very scarce, which caused a lot of speculation and conjecture to be done by people on the forums. Most news outlets are going to want to be able to independently verify facts they are presenting. There appear to be more relevant details available in the CAMP.BX case

really good awarness and good analytical for a super busy website. may be you have safe some people for make mistake on LocalBitcoins.com

According to the charges the main issue was that they did not get a license.  This is the same thing I was charged with.  I argued that I was not running a business, they claimed I was, and after about $300,000 cost to me we basically agreed to disagree on that point.  However, I think that coin.mx would have a very difficult time arguing that they were not a business - because they obviously were.  Also they have the owner evidently stating that yes, he was totally aware of the fact that he was required to have a license yet he chose not to get one.  The whole ransomware thing appears to be just one of the charges "added on" to give them more to talk about and charge him with.  This is just like in my case.  They seem to think that just the 1960 charge (operating a MTB without a license, 5 years, $250,000) is not enough or not sexy enough so they added on a unfounded, untrue accusations on top of the basic charge in order to "flush out" the document.

well if you put things that way it can be true the local bit its a site not fully worth but in my figures i got trust there in both sides soo i do keep up a bit my business there

If you are not in the United States of Martial Law ("Patriot" act) then localbitcoins.com is a safe, easy and convenient way to trade Bitcoins.

Here are the 186 ($42,222.00 as of this posting) Bitcoins taken from me by Homeland Security:

https://blockchain.info/address/1Eu38i1DkRAPAJhSqbseVroJDpMRfJbAx3

I am sure you guys can come up with some creative, interesting, fun ideas to do with this information.

DO YOU PEOPLE STILL FEEL THE SAME ABOUT LOCAL BITCOINS AND ITS SCAMMERS......THOUGHT THEY HAVE STEEPED UP THEIR GAME

I never got ripped of by people just buying or selling through localbitcoins.  Sure, some people tried to scam me on localbitcoins.  That is expected.  Exactly the same thing as on Craig's list.  There is always some lazy ass who thinks it is easier to try to take what is not theirs.

However, the real problem with localbitcoins in the United States under the current martial law is the GOVERNMENT.  They are the real lazy ass scammers with guns, laws and prison that you need to watch out for.

People tried some interesting ways to scam me but got zero.

Government scammed me out of over $80,000 and on top of that I ended up paying over $200,000 in legal fees and other expenses.

If you live in the Boulder area stop by for great music, good food, good beer and a short talk by yours truly concerning my case between the two bands:

https://www.dropbox.com/s/4wjj00pq83nn33d/Oct%2011%20Fundraiser%20and%20Celebration.pdf?dl=0

For more information about my case:

www.burtw.com
www.jmwagner.com

Homeland Security agents and their confidential informants, cooperating witnesses and local law enforcement minions are welcome to join us but for them there will be a very large cover charge.