Bitcoin Forum

They've frozen thousands of accounts. Twitter is in meltdown over it:

https://twitter.com/search?q=localbitcoins&src=typd

Another day, another centralized exchange springing new unannounced KYC requirements on their users and holding customers' coins hostage until they either give up their privacy or abandon their coins.

This behavior is both disgusting and scammy, but nothing new. Many exchanges have performed it in the past, some multiple times, and just pocketed the funds of the users who either didn't want to sacrifice their privacy, or were unable to meet the exchange's often ridiculous demands. Unfortunately, this particular scam will continue as there are still millions of users who don't understand why trusting a third party to hold your coins is a bad idea; I just saw another article saying Coinbase will soon be holding 1 million BTC belonging to their customers in their wallets. If you store your coins on an exchange or web wallet, be aware that at literally any point and with literally no notice, you could lose everything.

Obviously decentralized exchanges like BISQ are far better in almost every way, but if you absolutely must use a centralized exchange to buy and sell bitcoin, withdraw it to your own wallets immediately.

There were warning signs with localbitcoins. They introduced KYC measures where you had to submit ID documents to a third party. That third party (onfido) used dodgy AIs to verify you and apparently didn't do so well with non-white people. So lots of people had problems getting verified on there. Now they've gone totally insane and frozen out entire countries.

This at least looks like they are letting people withdraw their coins, or am I misunderstanding the quoted portion above? I learned my lesson, and now it's a quick transfer in and out as soon as I've made my exchange. I'm pretty lucky here, as there is a service for under 1000$ CAD daily if I need to sell, I just have to wait 3 days or so for the deposit sometimes less. Hell they'll even apply it against my utility bill if I so desired, which I don't but it is convenient to have this available.

I looked into using localbitcoins a few times but have always just found it easier to use the forum first, then hit the proverbial rolodex from past trades. bisq is something I've been meaning to set up in case the need ever arises. Shouldn't get to that considering I'm no longer dependant on one platform like my Quadriga days.

That's what they state, but both Twitter and Reddit are full of people complaining that accounts have been locked, unable to be deleted, requests for deletion going ignored, being placed on "forced holiday", and so forth. Take a look at this: https://www.reddit.com/r/localbitcoins/. By my count, 21 out of 25 posts on the front page are users complaining about accounts being locked, or being unable to verify or delete. Some users report they have already been waiting months for either verification or account deletion so they can withdraw their coins, and are still no further forward. There's even one of their community managers on Reddit stating that account deletion may be limited or even impossible, but gives no reasons as to why that may be the case:

https://www.reddit.com/r/localbitcoins/comments/et0r11/error_currently_you_cannot_request_account/ffeofxk/
https://www.reddit.com/r/localbitcoins/comments/esssvf/can_i_recover_my_bitcoins_without_canceling_the/ffeo2y9/

So this essentially seems like users' coins are forfeit until further notice.

Hope you didn't lose anything in the whole Quadriga debacle. Whatever happened with that? Last I heard it had been elevated to the FBI?

Well they had me in the first half then lol. Looks like another say one thing do the opposite or only help a select few.
I'm sick of seeing all this lipservice from these platforms, as they turn over a new leaf and it would be nice to see more people educated about these risks. Unfortunately most people entering the space don't get much further than google ads, or top search hits, which are heavily influenced.

Glad people are speaking up maybe it will push members that are unaffected off the platform as well. Not likely as most of the world can't see outside of their immediate issues or problems to benefit a greater good.

It was announced this week by email to the users concerned. Contact by email is a lot better than a blog post that nobody spends the time to read, or a tweet in the sea. Can't really blame Localbitcoin if it abides by the laws, it's a result of the latest anti-money laundering directive.

The fact some users are unable to withdraw is surely a technical point while they're working on something (preparing the Exodus or something else) I don't think Localbitcoin is going to lie on something like this, not in its interest.

But its trading volume will certainly be slapped in the face one time more

I won't blame them for AMLD5, but I will blame them for pulling the rug out from under their customers. If they planned to implement EDD on every customer from 20+ countries, they should have informed them weeks/months in advance. Instead, they induced a crisis by mass locking accounts.

LocalBitcoins tends to bend over backwards -- and hastily so -- for their government overlords. Is that what we get for a using a service based in Finland? Probably.

LocalEthereum (now LocalCryptos) is based in Australia and seems much more hands off. No KYC required and just a blanket "follow your local laws" clause in the user agreement (https://localcryptos.com/terms/terms-of-use):

Technically speaking, it's Finnish laws that they're complying with which were amended to comply with AMLD5. They could have relocated to a different EU country which would have bought them some time, or they could have relocated somewhere outside the EU/EEA.

It seems that compliance with the new anti-money laundering laws will force many platforms to prepare more of these lists^[1].
The thing that surprised me was that countries like Iran, North Korea, and Sudan were not mentioned in the list despite their presence on all the black lists, while countries such as Saudi Arabia, Nigeria, and Tunisia were included.
Is it related to trading volumes?



[1]

Its all about regulation and localbitcoins can no more be considered as peer 2 peer exchange as it is just following same regulatory guidelines set for centralized crypto-trading platforms.

It may be forced to them and looks like they don't have any other choice left unless they want to have same fate as bitmixer or other anonymous crypto-platforms.

i have seen many people who think just because it is called "localbitcoins" and it is users trading with each other, the platform must be decentralized and immune to pulling crap like this. but the reality is that localbitcoins is also another centralized exchange with different that usual exchange features.
that is why i've never touched lbc ever. i either use a centralized exchange or find other p2p methods that are really peer to peer and don't need any middle men.

LBC also did started as a peer to peer exchange without KYC or complexes, and now look how it becomes. I mean it's not also garanted that localcrypto will not change his terms and conditions toward users from selective countries. I wish not.
I don't know if this my help active/pro traders in LBC but i think i can mention about this; in localcrypto, you can import your reputation from LBC or Paxful following few easy steps set in your localcrypto account parameters. So for users who may lose their businesses due to recent LBC Tos updates and before to delete their accounts, they may export their reputation to localcrypto (old localethereum) .

This is the glimmer of hope for most users here. At least they have presented them with an option to deactivate their accounts and withdraw their funds from the platform altogether. I wonder though what happens to unverified accounts - are they still able to withdraw funds while remaining anonymous are are they forced to jump through the KYC hoops before they are actually able to withdraw?

But yeah, this case just shows how fragile centralized platforms can be, even when it comes to the likes of LBC which was previously known for its anonymity and upholding the privacy of the users.

Now, regulatory pressures are mounting. o_e_l_e_o put it best. Use centralized exchanges at your own risk, and treat it as a transitory space for your coins, not a wallet.

Yeah, there was a time where LBC wasn't bad, and before DEXs were really starting to gain traction, was probably one of the best fiat on-ramps for bitcoin. I used it for a while several years ago, and ended up trading with the same person who was local to me several times, before eventually taking our trades off the platform and just doing them directly peer-to-peer. This was long before any KYC requirements, but I'm glad I left it before they turned for the worse. Unfortunately my contact moved away, and so I now largely use BISQ as my fiat on-ramp.

Plenty of people are reporting that they are being prevented from deactivating their accounts, with no help from support who apparently have a one to two week backlog. Even if you do deactivate, there is a waiting period of 14 days before you get your coins returned, so it is too early to say whether or not this is actually running smoothly or not.

We know the risk associated with centralized exchanges but what other alternatives do we get? You mentioned BISQ but there is hardly any volume for non-European and non-US countries. Apart from BISQ there is no decentralized exchange in my knowledge which offers fiat to crypto exchange. So even if we like or not we have to use centralized exchanges for converting bitcoins to fiat or the other way around

Hey. That is Roger Ver.

Get a VPN! And those geoblocks will become a thing of the past. Free movies on sonycrackle no matter where you live. Go.

PS. HEX is coming to local bitcoins.

I am genuinely triggered by LBC, I loved that site for my trades, it was so smooth and convenient, an hour ago I log in to the site, and its not letting me deposit/withdraw/trade without having me to verify my address AND identity. Fuck that, I don't want any of that shit.

But I definitely need a better alternative, localcryptos is very dead in my region. Ugh, I am so mad right now. Any suggestions???

I am hating exchanges more and more by the day.

Here's a nice list of LBC alternatives: https://old.reddit.com/r/Bitcoin/comments/dyclf8/list_of_bitcoin_persontoperson_p2p_bitcoin/

Unfortunately most of them aren't very active. If you're not in a hurry to make a trade, it makes sense to post some offers and take advantage of an opportunity to make more profit on a trade.

Volume is currently the biggest issue by far with all decentralized exchanges. Unfortunately too many people are willing to give up their privacy and security for the convenience of a KYC-enforcing, custodial, centralized exchange. As time goes on, it will change though. It's much like bitcoin itself.

As governments spy more and more on their citizens, as banks decide more and more what their customers are and are not allowed to do with their own money, as corporations mine more and more of your data, bitcoin becomes more attractive to more people.

As more and more CEXs are hacked, freeze more and more accounts, demand more and more invasive KYC, then decentralized exchanges become more attractive to more users.

It's just a real shame that for most people it takes a centralized exchange to screw them over one way or another before they realize the benefits of a platform such as BISQ.

In terms of being forced to use a CEX, check out the great list that malevolent has linked to above. There are a variety of other DEXs you could try if BISQ isn't an option in your area. There are online communities which trade peer-to-peer, including the marketplaces on this forum and various sub-reddits. There are physical stores and ATMs, voucher and gift card exchanges, marketplaces, and so forth. There might well be an option you simply haven't looked in to yet.

Yeah I found none of these helpful, and I am surprised that there aren't many offers in my region anymore, its quite technologically advanced and yet, the local crypto market is dying, even on LBC. Great!

It might be time to resort to paypal now, fucking hell, I hate that shit so much ,its just as bad as an exchange with forceful KYC, except Paypal is more reliable.

To whatever extent we can, we should all be building more liquidity on sites like LocalCryptos, Bisq and Hodl Hodl.

Just put up some offers -- what can it hurt? Other traders who normally take liquidity from LocalBitcoins and Paxful are surely hurting from their AML/KYC policies and are looking for alternatives. There is also an opportunity for market making here since it's a less crowded market: Maybe put offers on both sides.

It's not whole countries as there are still plenty of countries that are not listed with the bans but this move is quite fishy as there will be plenty of users that will be affected by this banned.

Plenty users equals huge amount of money that will be freeze or can't be recovered anymore by this move so it is a big scandal if in case plenty of users can't get their money even after submitting all the required documents to unfreeze their accounts. This is the problem with the centralized exchange as we will not know when they are going to make this kind of move that will likely endanger our money therefore it will be best if we will not put a huge amount of money in any centralized exchange to avoid this kind of scenario.

Is this really news?

I mean, LBC has been doing this for months if not years now. Even on this forum there has been multiple reports of LBC banning accounts and freezing the funds within them because they didn't comply with the banned countries listed within the Terms of service agreement.

Two sides to this for the people in these affected countries. The positive thing is that they seem to still be able to withdraw after all, but the negative thing is that obviously they can no longer have access to one of the biggest P2P trading markets in the world. This is why I think decentralized markets like Bisq will thrive in the future, especially when it comes to p2p trades.

Yes! This is just like all the threads full of people complaining that there is not enough adoption, not enough people accept bitcoin or they have nowhere to spend their bitcoin, but they make exactly zero effort to try to spend it, talk to retailers/merchants/vendors about accepting it, or even spend it at places that do accept it.

If everyone had the attitude of "Oh, there's no volume on BISQ so I won't use it", then there would still be no volume on it anywhere. The places that it has taken hold is because some people put up some offers and waited. As squatter says, it can't hurt to put some offers up. If no one takes them, you've lost nothing, but it might just potentially start a growth of BISQ in your country/area, which is good for everyone long-term as centralized exchanges continue to pull nonsense like this.

Thing is that I tried P2P networks earlier. Some of the networks are similar to CEX and require that deposit should be made on their site before trading. In other cases, most of the buy/sell offers are scam. My friend once sold his bitcoins on so-call decentralized peer-to-peer trading network but buyer sent him funds from some hacked bank account. As a result, his bank account was froze and his bank revert the transaction. He lost his btc as well as money.

KYC at least ensures that buyer is genuine person and trading from his own bank account.

Panama is a country very well known to everyone, so I don't need to talk about it much

Iraq also has its problems known to all

But why the hell Botswana, Ghana, Ethiopia, Nigeria, Saudi Arabia, Tunisia and Sri Lanka are on that list? Has anything happened in particular that I haven't heard in the news?

They are taking precautions to a higher level I guess. But the good thing is they are letting the users to withdraw their coins and not total lockdown without the chance to get their money out. Users can always find another option to trade their crypto, now that more and more exchanges are coming out. People should not really be agitated about this.

It doesn't. There are huge marketplaces buying and selling bank accounts, verified accounts, identification documents, and so forth.

Still, platforms like BISQ have security measures in place to prevent stolen bank accounts being used, such as trading limits and account age witnesses, and you can simply opt not to use methods which can be reversed, such as cash or money orders.

You can see the press release from the European Commission here: https://ec.europa.eu/commission/presscorner/detail/en/IP_19_781. Essentially they have decided that these countries have particularly weak anti-money laundering systems, and so are applying enhanced checks to any person or business from those countries.

It's news because these are blanket bans. Take my country Pakistan for instance. We had dozens of buying and selling ads at any point in time and overnight its down to half a dozen or less of each type. They've banned people who've been trading for years.

None of the traders might be shocked reading this news from the respective countries. The countries mentioned above have very little number of traders who do trade in mass volume so also I think that they might not be holding excess funds onto localbitcoins. localbitcoins is one of the reputed exchange since times and we have faith in it.

Also if it had any intentions to scam the users than why would they give time to the traders to withdraw their funds from the platform? They might be facing some verification issues for those above mentioned countries as localbitcoins have made KYC verification mandatory which needs to be verified by the authorities.

I fully agree on what you say, liquidity can't be created from thin air, but from us rather. But usually when I trade, I want the trade to be dealt with in a matter of minutes, and I personally feel very anxious keeping my money on an exchange for days, especially after the bittrex mishap (https://bitcointalk.org/index.php?topic=5144742.msg51114017#msg51114017).

And also, there is 0 offers for my region in all these sites, and I don't know if I personally am willing to take the risk and try to create liquidity.

Try to backread on what o_e_l_e_o about this one.Its said that people havent able to withdraw their funds or simply their accounts been locked and restricted.
Therefore, majority of them wont really have any choice but either to comply or just let their funds locked and moved on.I actually do expect for these centralized platforms
to end up this way.It might not be now but for sure the day would come where its users would be the losser in the end of the day.People never ever learn that they shouldnt
keep funds on exchangers for too long to avoid these kinds of situations.

Many exchanges and wallet providers are collecting the KYC information from the every consumers using the application. I'm not sure how many exchanges will take action against the the users for making money in crypto field.
It should not be nightmare for many people.

I would accept this KYC requirement if they have announced it prior to the freezing of the accounts like they have given more time for the users to move around their funds, but what they did is something like a scam ICO project would do where all of the sudden they'll be asking for KYC before they receive payment for the bounty or receive the token/crypto they have bought. It some kind of ambush where the users really have no choice but to comply or else their money would be loss. I know that companies in the crypto industry such as Localbitcoin needs to comply with enhance KYC requirements for them to be able to operate in these countries but a surprise like this for their users is simply unacceptable in any way.

There were plenty of users from these countries on localbitcoins which is why there's such an uproar about what they did. My country Pakistan had many pages of buying and selling ads.

But, they have at least giving a chance for their users from the above mentioned countries to withdraw their funds before deleting their accounts. This might not indicate localbitcoins as a scam but it shows us that they might be trying to improve their customer verification.

Trading and exchanging bitcoins or any other cryptocurrency is not yet been legalized in the whole world which does not allow exchanges like localbitcoins to regulate globally. They need to follow some rules and regulations from the governments. Also, there are quit few traders from those countries mentioned in the source of OP so it might not be a large scale issue.

Abdul Samad , brother, need help, how to contact you?
your message box is restricted.

These are countries where entrepreneurs and investors as such are not as prominent and where governments are too influential and where culture is a great obstacle to technology innovation. So judging by these facts alone I'd guess that there's no much interest in these countries for generating or attracting potential investors since there way more attractive places to go to. Even still, I do not think exclusion and separation is a good approach  :-\

Abdusamad bhai, need help related to bitfinex kyc, how can I contact you?